We’d heard of MLPs–or master limited partnerships–but we’d never heard of SPACs. Until now. According to Motley Fool, “An MLP combines the tax benefits of a limited partnership with the liquidity that publicly traded securities — like stocks and bonds — offer.” You buy a “unit” in an MLP, which you can think of as a stock, but you the unit-buyer get treated (for tax purposes) like you’re a partner in the company–not like a typical stockholder. Which means you would get certain tax breaks not available to stockholders. MLPs have been quite popular, especially in the midstream (pipeline) sector. But according to an article in the New York Times, special purpose acquisition companies, or SPACs, are beginning to fill the “gap” left by the declining use of MLPs. How do SPACs work? We’ll let the NYT explain…
