I have a pile of MLP's in a taxable account, including KMP. They crank out the dividends like money factories. I had a bunch of them in our IRA's, but had to thin them out. KMP and NKA are my favorites. I'll never sell them.
I own all of my MLP's in an IRA. First, I don't have to worry about K1's. Second, some of the distributions
don't count towards the UBTI rate. I'll worry about the tax implications "if any" in 25 years. Meanwhile,
I'll enjoy the higher yields. Also, unless your audited, you'll get away with not doing anything. Some people
worry too much.
"and limited downside" Look out below if ten-year and thirty-year Treasury securities keep going up in yield and down in price.
I just started graphing KMP current yield and KMP current yield minus the constant maturity ten year Treasury note. KMP current yield graph looks like it bottomed at 6% and is higher than 6% 90% of the time. KMP yield minus 10-year Treasury yield bottomed at 4%- and is rarely below 4%. Push 10-year Treasury yields to 3% and that gives KMP a yield of 3%+4%=7%. I do have a friend that loves to see the yield on his stocks go up; I've given up explaining to him that that means he is losing money on the stock. KMP would need to go down in price to push the yield up to 7% where I would be a buyer.
Mines in my IRA and I love them there, I don't to mess with the K-1's and if and when I sell them it's a no brainer. I will trade the tax break for that any day. I don't own any in a taxable account any more.