Freedom Checks is a term given to payments made by master limited partnerships by Matt Badiali. Matt Badiali is a member of Banyan Hill Publishing Company and is responsible for their investment advice column Real Wealth Strategist. Matt Badiali began his career in academics as a trained scientist. He received his bachelor’s degree and earth sciences and his masters in geology from Florida Atlantic University. He was in the process of pursuing his Ph.D. and teaching classes in geology the University of North Carolina when an expert from the financial industry contacted him. This expert was in the process of building a team that would be researching investment opportunities in the natural resource and commodities markets. This expert needed a trained geologist in order to adequately research investment opportunities and offered Matt Badiali position within his team. Read more at Agora News about Freedom Checks.
Matt Badiali took this opportunity and shortly after was traveling the world gaining the first-hand experience with the natural resource markets. It was during the process of researching the oil and gas industries that Matt Badiali first came to be aware of the existence of Master Limited Partnerships. Master Limited Partnership is a particular kind of classification for tax purposes that a corporation can have. It was first created whenever Congress passed Statute 26-F in the 1980s. This was a piece of legislation that was pushed through Congress in an effort to help give tax advantages to companies that were assisting America pursue energy independence. In this legislation, requirements were specified for companies in order to receive tax privileges.
According to Statute 26-F if a company is able to generate 90% of its revenues through the production, processing, presentation, and distribution of oil and natural gas domestically within the borders of the United States of America, then they are able to qualify as a Master Limited Partnership. In addition to specifying where the source of companies incomes must be Statute 26-F also requires the companies pay shareholders a portion of the revenues on either a monthly or quarterly basis. It is this process of income distribution that Matt Badiali is referring to whenever he coined the term Freedom Checks. Any income that an individual receives as a result of these Freedom Checks is treated as a return of capital. Since it is treated as a return of capital, it is only subject to the lower capital gains rate of tax and not to the higher personal income tax rate. Watch: https://www.youtube.com/watch?v=4sCMlK7_zbc