MLPs were designed in conjuntion with the energy companies and the IRS to make building pipelines and power transmision lines a more actrative investment. Most of its income must come from the transport of oil,gas and biofuels. I assume that the railroad that 90% of its traffic was crude oil, Grain to ethanols, and biodiesal might quilify-In the United States, a master limited partnership (MLP) is a limited partnership that is publicly traded on an exchange qualifying under Section 7704 of the Internal Revenue Code. It combines the tax benefits of a limited partnership with the liquidity of publicly traded securities.
To obtain the tax benefits of a pass through, MLPs must receive their income from qualifying sources such as from exploration, mining, extraction, refining of oil and gas and the transportation of alternative fuels like biodiesel. To qualify for MLP status, a partnership must generate at least 90 percent of its income from what the Internal Revenue Service (IRS) deems "qualifying" sources. After the 2015 Proposed Regulations from the IRS, only those activities specifically listed related to the production, processing and transportation of oil, natural gas and coal would qualify for favorable tax treatment.[1]
MLPs as opposed to IPL of stock could they be used as a solid source of capital to build railroads? The problem with building railroads is right of way and even if you you used rail banked right of ways you still have to aqure easements and NIMBYs. Can you imgaine walking into a bank in 2016 and asking for finance to build a railroad today? Pipe lines carry energy and rails carry stuff lots of stuff
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