Freedom checks are commonly known as the necessary cash payments channeled to all shareholders of partnerships which are publicly traded under the United States’ statute 26. It is a tax-free investment opportunity that requires the statute 26-F federal law to legally operate. Freedom checks is neither a federal program nor run by government. The program enables well over 550 businesses related to energy, to remit their monthly or quarterly checks to their respective investors.
These firms, known as Master Limited Partnerships, play significant roles both in oil and natural gas industries. They drill new wells, transport fuel via pipelines, and operate refineries. The firms are obliged to remit to the investors, 90 cents of every dollar they earn for them to be qualified for the special tax exemption. Most of the Master Limited Partnerships refer to the freedom checks as distributions of which various shareholders from time to time receive up to $160,000 worth of these dividends quarterly. Whereas the investors pay a minimum do not tax on the capital gain, neither the Master Limited Partners nor their shareholders are subjected to income taxation.
At the moment, there are approximately 568 MLPs which are projected to be able to pay about $34.6 billion in the next year. They take the lead in craving for the energy independence of America. Any company that seeks to qualify for MLP must be in a position to generate a ninth of its income from the production, exploration or transportation of natural resources such as gas and oil. Since being created in 1981, MLPs have featured some benefits. They are exempted from corporate taxes and as a result, they can retain more cash that they ultimately pay off to investors. MLPs are also considered as low-risk investments, allowing them to make reliable and consistent payoffs to investors.
Besides its application in the energy sector, the concept of freedom checks envelops other closely related opportunities in other fields too. For example, a tax-free option is provided by real estate, an investment trust of which 90 cents of each dollar earned is wired to the shareholders.