Put $200,000 into six well-known high-yield stocks, and you would collect about $11,400 a year. If you hold these stocks outside a tax-advantaged account in the 24% bracket, roughly $2,166 of that goes to the IRS every year. Most of that tax comes from the two highest yielders.
Roth Versus Taxable: A $2,166 Gap Every YearThe portfolio puts an equal $33,333 into each of six NYSE payers. On the taxable side, MPLX (NYSE:MPLX) and VICI Properties (NYSE:VICI) distributions are taxed at the 24% ordinary rate. The four C-corporations are taxed at the 15% qualified rate because qualified dividends count as net capital gain under 26 U.S.C. § 1(h)(11). For 2025, the 24% bracket covers single filers with taxable income from $103,351 to $197,300.
Stock Yield Annual Income Taxable Cost at 24% MPLX 8.03% $2,677 $642 VICI 7.18% $2,393 $574 United Parcel Service (NYSE:UPS) 5.91% $1,970 $296 AT&T (NYSE:T) 5.13% $1,710 $257 Bristol-Myers Squibb (NYSE:BMY) 3.99% $1,330 $200 Kinder Morgan (NYSE:KMI) 3.96% $1,320 $198A Roth account keeps the full $11,400. Outside a tax-advantaged wrapper, it keeps $9,234. That is an annual gap of $2,166, or $21,663 over 10 years with no growth expected. Federal law excludes qualified Roth distributions from gross income under 26 U.S.C. § 408A(d)(1).
Why Each Stock Fits the Roth- MPLX: The top income producer. MPLX raised its distribution 12.5% to $1.2111 per unit, with 1.3x coverage. Its K-1 tax treatment is complex: much of the payout is often classified as return of capital, and MLPs held in IRAs can raise UBTI issues above $1,000.
- VICI: REIT dividends have ordinary income tax treatment, which makes VICI a natural Roth holding. The $0.46 quarterly dividend runs at about a 75% AFFO payout.
- United Parcel Service: UPS has the highest yield of the C-corporations. Coverage is tight, though: guided dividend payments of about $5.4 billion compare with about $6.1 billion of adjusted free cash flow.
- AT&T: AT&T plans to hold its $1.11 annual dividend steady through 2028, supported by a 2026 free cash flow outlook of $18B+.
- Bristol-Myers Squibb: The $2.52 annual dividend sits well below non-GAAP EPS guidance of $6.35 to $6.55.
- Kinder Morgan: Kinder Morgan raised its $1.19 annual dividend by 2%. Leverage is about 3.5x, and the project backlog is $14.4 billion.
The qualified rate stays at 15% from the 22% bracket through the 32% bracket and rises to 20% at the top. That means nearly all of the increase across brackets comes from MPLX and VICI. At 24%, those two account for $1,217 of the $2,166 total owed to the IRS. High earners may also owe the net investment income tax, which these figures leave out.
Compounding Makes the Gap Bigger Every YearThe 24% bracket gap of $2,166 adds up to $43,326 over 20 years before any reinvestment. Reinvest each year’s savings inside the Roth at a conservative 4%, and the total reaches $26,009 after 10 years and $64,508 after 20. No price appreciation is included. The figure measures how much income holding these stocks outside a tax-advantaged account costs over time.
What to Do Before Your Next Filing- Pull your 1099-DIV and K-1 forms and multiply ordinary distributions from REITs and MLPs by your top tax rate. That is your real annual cost.
- Look at return-of-capital and UBTI rules for MPLX before moving it. VICI-style REITs have simpler tax treatment to research.
- Build a phased Roth conversion that starts with ordinary-income payers. Compare the tax due on the conversion with the 20-year income gap for your bracket.