President Trump released his tax framework at the end of September, and many investors are curious about how the president’s tax plan would affect MLPs. At only nine pages long, it lacks the intricate detail of proposed legislation, but some general conclusions can be drawn.

Under the current system, MLPs are partnerships and tax pass-throughs, meaning investors receive an IRS Schedule K-1 for their tax returns. As such, investors typically pay tax on their portion of the MLP’s income at their own personal income tax rate. However, due to accounting rules and accelerated depreciation flow-through, much of this (often 70%-90%) is considered return of capital and tax payments are deferred until sale.