Question

Which of the following is true of master limited​ partnerships?
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Part 1
A.
Master limited partnerships are subject to double taxation.
B.
Shares of the master limited partnership are held by only a few people and are not available for sale to the public.
C.
Master limited partnerships are typically formed by groups of​ doctors, lawyers,​ accountants, and other professionals.
D.
Master limited partnerships sell partnership interests to investors on public markets like the New York Stock Exchange.
E.
Master limited partnerships are comprised of sole proprietorships or partnerships that agree to work together for their common benefit.

Answer 1

The true statement about Master Limited Partnerships is D. Master limited partnerships sell partnership interests to investors on public markets like the New York Stock Exchange.

What are master limited partnerships?

Master limited partnerships are publicly-traded partnerships taxed as partnerships.

While combining the tax benefits of a partnership with the liquidity of publicly-traded entities, master limited partnerships have become hybrid entities of limited partners and general partners.

The limited partners invest their capital into the partnership for periodic cash distributions, while the general partners are responsible for running the MLP's operations.  The compensation of general partners is known as incentive distribution rights (IDRs).

Thus, the correct option for Master Limited Partnerships is Option D.

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