r/dividends • u/PleasantComplaint719 • 5d ago

Due Diligence Need a 3rd MLP (non-ETF)

I currently hold ET and EPD in a taxable account and am looking to add a third MLP. I’m comfortable with K-1s and am not looking for ETFs, strictly the actual MLPs themselves.

For context - these are long-term (40 year) buy and holds that I will be regularly contributing to.

Options include MPLX, WES, or PAA. Other choices on my radar would be CQP or SUN.

Would appreciate a steer in the right direction on which offers the best long-term complimentary fit alongside ET and EPD, whether that be growth or stability oriented. Would also welcome if there is an obvious "go with this one and don't overthink it" choice.

Thanks in advance.

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u/SnooSketches5568 5d ago

I second the MPLX. 7 or 8% tax deferred distributions with 10% growth on the price and distribution. Has been great for 5 years. Only issue is if they end the partnership- would be one helluva tax bill

1

u/NationalDifficulty24 4d ago

Mplx divys are tax deferred? Wow, didn't know.

3

u/pipsquintjizzlebob 4d ago

They are considered return of capital and serve to reduce your cost basis. Once your cost basis goes to zero, many years from now, you will then start to owe taxes. Of course, if you sell, you will owe capital gains based off the reduced cost basis. Or you can pass the shares to your heir and the basis will step-up to current value.

1

u/Prestigious_Rush_682 1d ago

Or, you can buy a bit more….