A lot of investors avoid Schedule K-1 reporting investments. These tax reporting documents can add significant extra work at tax filing time. On the flip side, K-1 investments typically pay tax-advantaged distributions. There exists a matched pair of stocks that lets us see how much the investing public values the simplicity of Forms 1099 over Schedules K-1.
One problem with K-1 investments is that owning this type of security in qualified retirement accounts such as IRAs can lead to significant tax expenses and penalties.
So, let’s go over a very popular energy income investment that uses K-1s – and see how you can get similar payouts without the K-1 hassle…
This post originally appeared at Investors Alley.