Master Limited Partnership Funds

Our focus on and deep expertise with Master Limited Partnership (MLP) funds can help you comply with the myriad of regulatory audit and taxation rules at the federal, state and local levels. Knowledgeable in the unique and complex needs of funds investing in MLPs, we provide audit services to more than 50% of the open-end MLP funds and more than 85% of the MLP Exchange Traded Funds in the industry. Focused on continually expanding and deepening our capabilities, we’ve served MLP funds throughout all phases of their existence — from choosing the optimal structure, to original launch and seeding, to ongoing support as the funds mature.
 
In addition to traditional audit services, our MLP fund specialists can provide you with critical expertise in another key area:  taxation. On average, our tax team spends more than 100 hours each year researching and training, which is well beyond state licensing requirements. Our training includes learning about issues facing MLPs and the funds investing in them. We help clients in numerous areas, such as analyzing their effective tax rates, assessing state tax nexus issues and franchise exposure, evaluating the likelihood of realizing deferred tax assets and calculating the tax cost basis of the underlying MLPs.

Services

  • Audits, reviews and other attest services
  • Tax planning and compliance:*
    • Preparation of federal returns
      • Prepare federal tax return
      • Prepare federal tax extension
      • Coordinate appropriate timing of deadlines, payments and filings
    • Preparation of Form 8937 Report of Organizational Actions Affecting Basis of Securities (prep, review, sign)
    • Review of fund draft registration statement, prospectus and SAI tax disclosure sections, and other relevant portions for accuracy and completeness
    • For purposes of the registration statement, assistance with analysis of feasibility of quarterly versus monthly distributions; and prior to effective date of fund, analysis of model portfolio for potential, estimated tax exposure
    • Preparation of state income tax returns
      • Help management through the process of determining nexus and cost-efficiency of state filings
      • Request and analyze detailed apportionment data from underlying K-1 investments
      • Provide management with a summary and explanation of state income apportionment to aid in keeping them informed and educated of the process
      • Prepare state income tax returns and extensions
      • Coordinate appropriate timing of deadlines, payments and filings
    • Preparation of state franchise tax returns
      • Help management through the process of determining nexus
      • Prepare state franchise tax return and extensions
      • Coordinate appropriate timing of deadlines, payments and filings
    • Address routine tax notices, information requests, assessments and other correspondence received from federal, state and local taxing authorities; examinations and appeals would be billed under a separate engagement
    • Preparation of tax workpapers
      • Coordinate with administration and K-1 providers to reconcile K-1s for accurate reporting; if needed, adjust incorrect purchases, sales, year-end transactions posted in the wrong period and other events affecting ownership
      • Summarize and analyze K-1s received
      • Calculate the basis (regular tax, AMT and E&P) of each investment, taking into account K-1 activity and partial sales
      • Educate management on the various methods used in the industry for calculating realized gain/loss on partial sales so they can determine the most appropriate method for the fund
    • Work with management on a quarterly basis to determine an appropriate federal and effective state tax rate to be used for daily tax accruals
    • Assist management with accrual of franchise tax liabilities
    • Consultations with management/administration on developing processes to account for potential permanent tax differences, e.g., dividends received deduction from any C-Corp dividends received, which may materially affect the effective daily tax rate
    • Calculation of estimated tax provisions for financial statement reporting (annual and semi-annual periods)
      • Current & deferred tax accruals/benefits
      • Rate reconciliation
      • Work with management on ASC 740 analysis and valuation allowances
      • Calculate estimated E&P for financial statement purposes and for investor reporting purposes (1099s / 19a notices)
    • Prepare provision to return reconciliations to present to management for potential adjustments 
       

* Some tax services may be prohibited if the fund is also an audit client.