A master limited partnership, also referred to as an MLP, is a publicly traded partnership, where the limited partnership interests are traded much like shares in a corporation. There are two types of partner in an MLP. The general partner owns a small percentage of the MLP, usually 2%, and manages the MLP. The limited partners own the remainder of the MLP. As the investors, they provide the capital to the MLP. If the MLP is a corporation, the general partner would be the corporate management and the limited partners would be the shareholders. So why not just be a corporation? The advantage of an MLP is that, unlike a corporation, an MLP does not pay income taxes. Thus, an MLP has all the advantages of limited liability like a corporation, without a corporation’s tax burden. The added bonus is that the limited partners have the advantage of liquidity just like with owning stock. The limited partners pay taxes on MLP income on their personal income tax returns, which can get complicated. However, there are also benefits, as the limited partners are able to claim the MLP depreciation on their tax returns, which reduces their personal income taxes and acts to “shelter” the MLP cash distributions from income tax. Not every business can be an MLP. For a business to qualify, the IRS requires that the business receive at least 90% of its revenue from the natural resources industry or real estate.