MLP Logistics Carve-Out: Prudent Structuring or Economic Sham?
Energy & Natural Resources
·
Complexity
Medium
2026-03-28
384d69bf
Formation of $2 billion natural gas processing MLP with ancillary trucking and railcar loading operations representing 15-20% of projected EBITDA ($75-100M annually). Taxpayer elected to exclude logistics operations from MLP structure and house them in taxable C-corp subsidiary to avoid qualifying income test risk under IRC § 7704.
Exclude trucking and railcar loading income from MLP structure and operate logistics business through separate C-corporation subsidiary paying corporate tax. Position preserves MLP qualifying income r…