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Is not going to let someone earn money without paying taxes, after all). Is supplied to the unitholder on a form K 1 supplied by the MLP's general partner.The upside to MLPs are clear: no tax on the income until that income exceeds the cost basis; and MLPs typically pay nice returns (as high as 15% or more per year). But there are a few disadvantages to MLPs that may make them undesirable in a retirement portfolio.First, technically, the unitholder is responsible for paying state income tax on the MLP's revenues in every state through which the MLP realizes cash flow.3 Even nonresidents.Second, MLPs if held within a tax deferred or tax advantaged account may place an unwanted burden on the account.

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