How Treating Series A Preferred Distributions as Guaranteed Payments Erodes Investors’ QBI Tax Benefits
Sunoco LP (SUN) has disclosed a new risk, in the Debt & Financing category.
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The partnership’s decision to treat Series A Preferred Unit distributions as guaranteed payments for the use of capital prevents those amounts from qualifying as “qualified business income” under current Treasury Regulations. This reduces the after‑tax yield for non‑corporate investors compared with alternative structures that would permit use of the 20% QBI deduction.
Overall, Wall Street has a Strong Buy consensus rating on SUN stock based on 6 Buys.
To learn more about Sunoco LP’s risk factors, click here.
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