How do master limited partnerships differ from REITs for real estate-adjacent investing?

Both master limited partnerships (MLPs) and REITs offer publicly traded exposure to real asset income, but they differ significantly in structure, taxation, and the types of assets they typically hold.

Structural Differences

• REITs must distribute at least 90 percent of taxable income to shareholders and typically focus on owning and leasing physical real estate directly.
• MLPs are structured as partnerships rather than corporations, and while some hold real estate, many focus on energy infrastructure or other capital-intensive, real asset-adjacent businesses.

Tax Treatment Differences

• REIT dividends are generally taxed as ordinary income to shareholders, without the additional paperwork complexity MLPs can involve.
• MLP investors receive a K-1 tax form rather than a standard 1099, which can complicate tax filing and makes MLPs less suitable for certain retirement account structures.

For investors specifically seeking real estate exposure, REITs are generally the more direct and administratively simpler option, while MLPs serve a different, though sometimes overlapping, role in real asset investing.