Delek Logistics Partners (DKL) issues a Schedule K-1. Unlike pure midstream MLPs, DKL is tied to Delek US Holdings (DK) — a refining company. This refining connection means DKL's income character, UBTI profile, and recapture exposure differ from what you may expect from a typical pipeline MLP.
By Lucas Andersen — Last updated March 6, 2026
DKL’s refining-linked income creates a different tax profile. → Track your DKL basis free
Most midstream MLPs generate income primarily from fee-based transportation and processing services. DKL is different. It is controlled by Delek US Holdings (DK), a refining company, and DKL’s operations are closely tied to Delek’s refining activities. This means DKL’s K-1 income character can include more ordinary business income relative to other MLPs, with two specific tax implications.
1. Higher UBTI risk in IRAs. The refining connection means more of DKL’s income may qualify as unrelated business taxable income than a pure pipeline MLP. If you hold DKL in an IRA, monitor Box 1 carefully. If it exceeds $1,000, your IRA must file Form 990-T and pay tax on the excess. See our MLP in an IRA: UBTI guide.
2. Different §751 exposure profile. When you sell DKL, the recapture character may reflect refining-related assets rather than purely midstream infrastructure. The ordinary income portion on sale could be proportionally larger than for a pure pipeline MLP. Review your §751 recapture exposure before selling.
DKL’s 2025 K-1 is expected by mid-March 2026 (the 2024 K-1 was announced March 10, 2025). Download at taxpackagesupport.com/DelekLogistics or call 1-833-263-0144.
DKL provides gathering, pipeline transportation, and storage services for crude oil, natural gas, and refined products. It operates primarily in Texas, Arkansas, and Tennessee, serving Delek US Holdings’ refining operations. DKL is one of the smaller, less liquid MLPs — some investors may be first-time K-1 recipients who bought DKL for its yield without understanding the K-1 implications that come with every partnership investment.
DKL is small enough that many of its investors are individual retail holders who may never have dealt with a K-1 before. If that’s you: a K-1 is NOT a 1099. You cannot just plug one number into TurboTax. It requires entering multiple boxes (Box 1, Box 19A, Item K, Box 20 codes), tracking your cost basis separately from your broker, and potentially filing state returns in states where DKL operates. Read our K-1 Basis Worksheet Explained and TurboTax K-1 entry guide before you start.
DKL distributed $1.125/unit in Q4 2025 ($4.50/year annualized) — its 52nd consecutive quarterly distribution increase. Worked example: 200 units at $40/unit ($8,000 basis). At an illustrative 55–70% return of capital on $4.50/unit annual distributions, basis erodes ~$2.48–$3.15/unit per year. After 5 years: IRS-adjusted basis approximately $4,850–$5,520 vs broker’s $8,000 — a gap of $2,480–$3,150 (31–39%). The refining-linked income may mean more of each distribution is taxable rather than ROC — check your actual K-1 each year.
DKL operates primarily in Texas (no income tax), Arkansas, and Tennessee (no income tax on wages, but Hall tax was repealed — check current year rules). This is a smaller state filing footprint than most large MLPs. Check your K-1 state supplement for exact allocations.
Assuming DKL’s tax profile is identical to pure pipeline MLPs (it isn’t — refining connection matters). Holding in an IRA without monitoring UBTI risk. Buying for the yield without understanding K-1 filing requirements. Using broker cost basis at sale without IRS adjustments. Not checking whether DKL’s §751 recapture is proportionally larger than expected.