Photo credit: Kinder Morgan

Master limited partnerships pay investors very well, but that extra income comes with an extra headache come tax time. The Form K-1 these entities give their investors typically arrive toward the end of tax time and are a bit more complex to understand. While these forms add only a few minutes to your tax prep time, you can avoid them altogether by simply investing in a different entity.

For example, instead of investing in LINN Energy (NASDAQOTH:LINEQ) and waiting for the arrival of the Form K-1 each year, you could have invested in LinnCo (UNKNOWN:LNCO.DL). While LINN Energy owns thousands of oil and gas wells around the U.S., LinnCo's only assets are its ownership of units in LINN Energy. LinnCo investors get the benefit of LINN Energy's business model without the added tax headache at the deadline each year.

Meanwhile, a general partner holding company like Kinder Morgan (NYSE:KMI) takes that relationship to a different level. Not only does Kinder Morgan own a substantial amount of the units of its two MLPs, but it also owns the incentive distribution rights. Those rights enable Kinder Morgan's investors to see supercharged dividend growth without the tax headache of the MLPs.

I've created the following slide show to help you understand the differences between owning LINN Energy and LinnCo as well as Kinder Morgan and its two MLPs. The slide show should help get you started on adding some easy retirement income to your portfolio without adding any extra paperwork to your plate. 

Matt DiLallo owns shares of Linn Co, LLC, and Linn Energy, LLC, and has options on Kinder Morgan. The Motley Fool recommends and owns shares of Kinder Morgan. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.