Well, even if you went through the lengthy process of understanding all the values on the form, most likely you would end up with the same tax liability that you have right now. If it were me I would just ignore it, but I'm not a tax expert and you'll probably go to jail if you follow my advice.
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SVXY k-1 and Turbotax
- Thread starter fusiforme
- Start date
Well, even if you went through the lengthy process of understanding all the values on the form, most likely you would end up with the same tax liability that you have right now. If it were me I would just ignore it, but I'm not a tax expert and you'll probably go to jail if you follow my advice.
Well, even if you went through the lengthy process of understanding all the values on the form, most likely you would end up with the same tax liability that you have right now. If it were me I would just ignore it, but I'm not a tax expert and you'll probably go to jail if you follow my advice.
It would be ridiculous If i had to go to an usa jail for not paying usa taxes when Im not even an american or enjoying the benefits of being american, LOL, im just gonna ignore it I guess...
serously even paying for a plane ticket to lift me into America would cost much more than the taxes I would have paid, if ever.
Hello everyone, found this forum while researching how to handle my K-1 for UVXY. Hope someone can point me in the right direction. I'm showing a sizeable amount in 11C even though I lost money trading UVXY during 2014. Anyone figure out how to properly report this?
If I make the following assumption:
You did not hold a position from 2013 to 2014 or from 2014 to 2015 on UVXY
then:
As your K-1 should say in the fine print, you have to report 11C somewhere on your tax return involving Section 1256 contracts (your tax package should handle this). But, however much is in 11C, you add that to your cost basis of your UVXY position when you sell it. Therefore, you are just "moving around numbers", but your tax liability stays the same. This is all to satisfy the IRS when they try to match your K-1 to your tax return.
In your case, you should be reporting your loss on UVXY, plus a further loss due to the cost basis adjustment. Assuming your reported the 11C number correctly, then the cost basis adjustment and the 11C number will cancel each other out, and your tax liability will be based on your UVXY trading loss and nothing else.
You should reread this thread in its entirety and see if you can glean some information from it (because your problem seems similar to the OP).
It is really hard to give advice on this topic because each K-1 is different... so I am willing to look at people's K-1s (if they are really desperate) and give my uninformed opinion on how they should report it (I am not a tax expert). Maybe private message me with a pdf (or images) of the K-1 and make sure you don't leave any identifying information on your K-1 scan. Then I could take a look and tell you how I would report it on my own personal taxes. Note again that I am not a tax professional. Did I mention that I am not a tax professional?
Or you could pay somebody to look at it. However, unless you find somebody who has dealt with these beasts before, they will probably be useless and overcharge you. For example, the people at GreenTraderTax seem competent.
Commodities/futures ETFs
Commodities/futures ETFsmay not use the RIC structure, so they are usually publicly traded partnerships (PTPs). Commodities/futures ETFs issue annual Schedule K-1s passing through their underlying Section 1256 tax treatment on Section 1256 transactions to investors, as well as other taxable items. Selling a commodities ETF is deemed a sale of a security, calling for short-term and long-term capital gains tax treatment.
Taxpayers invested in commodities/futures ETFs may need to make some cost-basis adjustments on Form 8949 to capital gains and losses, ensuring they don’t double count some of the Schedule K-1 pass-through items. Income passed through on K-1s is added to cost basis.
Non-resident aliens investing in the U.S.
The investing class is growing fast worldwide. Fortunes are made in emerging markets and partially stored in developed markets, with the U.S. markets enjoying dollar and investment supremacy. That would certainly not be the case if Congress taxed non-resident aliens living abroad on capital gains sourced in the U.S. Non-resident aliens are subject to tax withholding on dividends, certain interest income and sales of master limited partnerships like energy companies. They have U.S. source income — effectively connected income — on real property and regular business operations located in the U.S.
A non-resident alien living abroad can open a U.S.-based forex or futures trading account and not owe any capital gains taxes in the U.S. Same goes for a securities account, only there could be some dividend tax withholding. If the non-resident spends more than 183 days in the U.S., he owes U.S. taxes on net U.S. source capital gains, even though he may not trigger U.S. residency under the substantial presence test. (U.S. residency is triggered with legal residence status — citizenship or permanent resident status — or meeting the substantial presence test.) There are exemptions from the 183-day capital gains tax rules for employees of foreign governments living in the U.S. and special rules for students temporarily in school in the U.S. The non-resident alien doesn’t need a U.S. tax identification number and is not required to file a U.S. non-resident tax return, Form 1040NR. If the non-resident is a member of a U.S.-based “pass through” taxable entity — such as a hedge fund or proprietary trading firm — that person is still exempt from effectively connected income.
Commodities/futures ETFsmay not use the RIC structure, so they are usually publicly traded partnerships (PTPs). Commodities/futures ETFs issue annual Schedule K-1s passing through their underlying Section 1256 tax treatment on Section 1256 transactions to investors, as well as other taxable items. Selling a commodities ETF is deemed a sale of a security, calling for short-term and long-term capital gains tax treatment.
Taxpayers invested in commodities/futures ETFs may need to make some cost-basis adjustments on Form 8949 to capital gains and losses, ensuring they don’t double count some of the Schedule K-1 pass-through items. Income passed through on K-1s is added to cost basis.
Non-resident aliens investing in the U.S.
The investing class is growing fast worldwide. Fortunes are made in emerging markets and partially stored in developed markets, with the U.S. markets enjoying dollar and investment supremacy. That would certainly not be the case if Congress taxed non-resident aliens living abroad on capital gains sourced in the U.S. Non-resident aliens are subject to tax withholding on dividends, certain interest income and sales of master limited partnerships like energy companies. They have U.S. source income — effectively connected income — on real property and regular business operations located in the U.S.
A non-resident alien living abroad can open a U.S.-based forex or futures trading account and not owe any capital gains taxes in the U.S. Same goes for a securities account, only there could be some dividend tax withholding. If the non-resident spends more than 183 days in the U.S., he owes U.S. taxes on net U.S. source capital gains, even though he may not trigger U.S. residency under the substantial presence test. (U.S. residency is triggered with legal residence status — citizenship or permanent resident status — or meeting the substantial presence test.) There are exemptions from the 183-day capital gains tax rules for employees of foreign governments living in the U.S. and special rules for students temporarily in school in the U.S. The non-resident alien doesn’t need a U.S. tax identification number and is not required to file a U.S. non-resident tax return, Form 1040NR. If the non-resident is a member of a U.S.-based “pass through” taxable entity — such as a hedge fund or proprietary trading firm — that person is still exempt from effectively connected income.
Spr,
Sorry for my delay in getting back to this thread. Too many distractions.
To answer your question: yes, I did dispose of all the shares bought at the end of 2013 in 2014.
I will try to break it down simply, to give you a clear picture:
2013
Current year increase: $2,401
- 30 shares acquired and disposed of in 2013
- 120 shares bought in November and December of 2013 and held into 2014.
2014
Cumulative adjustment on sale of shares acquired in 2013: $1,767
- shown on my sales schedule as a disposition of 240 shares, reflecting the 2 for 1 split that took place in 2014
So, if it is true that my 2014 cumulative adjustment should be the same as my 2013 current year increase, there is $634 which "slipped between the cracks" somehow.
Could that $634 be related to the shares I held and sold during 2013? (But remember, there were no cumulative adjustments at all on my 2013 dispositions)
Or does this reflect extra taxes I am paying as a holder of the fund?
I see this statement on the FAQ: "While investors may incur trading profits and losses through buying and selling Volatility, they are also subject to tax on their portion of any income or gains passed through by the trust. In additions to income and gains, Volatility ProShares can also pass through losses, which shareholders may use to reduce their personal taxes. The tax treatment of income ,gains or losses depends on the Fund's underlying positions."
So am I paying some extra taxes here, based on the fund's underlying positions, because of gains passed through to me by ProShares?
If you need any other information from my forms to help you figure out what might have gone wrong, just let me know.
Sorry for my delay in getting back to this thread. Too many distractions.
To answer your question: yes, I did dispose of all the shares bought at the end of 2013 in 2014.
I will try to break it down simply, to give you a clear picture:
2013
Current year increase: $2,401
- 30 shares acquired and disposed of in 2013
- 120 shares bought in November and December of 2013 and held into 2014.
2014
Cumulative adjustment on sale of shares acquired in 2013: $1,767
- shown on my sales schedule as a disposition of 240 shares, reflecting the 2 for 1 split that took place in 2014
So, if it is true that my 2014 cumulative adjustment should be the same as my 2013 current year increase, there is $634 which "slipped between the cracks" somehow.
Could that $634 be related to the shares I held and sold during 2013? (But remember, there were no cumulative adjustments at all on my 2013 dispositions)
Or does this reflect extra taxes I am paying as a holder of the fund?
I see this statement on the FAQ: "While investors may incur trading profits and losses through buying and selling Volatility, they are also subject to tax on their portion of any income or gains passed through by the trust. In additions to income and gains, Volatility ProShares can also pass through losses, which shareholders may use to reduce their personal taxes. The tax treatment of income ,gains or losses depends on the Fund's underlying positions."
So am I paying some extra taxes here, based on the fund's underlying positions, because of gains passed through to me by ProShares?
If you need any other information from my forms to help you figure out what might have gone wrong, just let me know.
Last edited:
Spr,
Sorry for my delay in getting back to this thread. Too many distractions.
To answer your question: yes, I did dispose of all the shares bought at the end of 2013 in 2014.
I will try to break it down simply, to give you a clear picture:
2013
Current year increase: $2,401
- 30 shares acquired and disposed of in 2013
- 120 shares bought in November and December of 2013 and held into 2014.
2014
Cumulative adjustment on sale of shares acquired in 2013: $1,767
- shown on my sales schedule as a disposition of 240 shares, reflecting the 2 for 1 split that took place in 2014
So, if it is true that my 2014 cumulative adjustment should be the same as my 2013 current year increase, there is $634 which "slipped between the cracks" somehow.
Could that $634 be related to the shares I held and sold during 2013? (But remember, there were no cumulative adjustments at all on my 2013 dispositions)
Or does this reflect extra taxes I am paying as a holder of the fund?
I see this statement on the FAQ: "While investors may incur trading profits and losses through buying and selling Volatility, they are also subject to tax on their portion of any income or gains passed through by the trust. In additions to income and gains, Volatility ProShares can also pass through losses, which shareholders may use to reduce their personal taxes. The tax treatment of income ,gains or losses depends on the Fund's underlying positions."
So am I paying some extra taxes here, based on the fund's underlying positions, because of gains passed through to me by ProShares?
If you need any other information from my forms to help you figure out what might have gone wrong, just let me know.
Just curious, what does your Current Year Increase say on your 2014 K-1?
Hi,Just curious, what does your Current Year Increase say on your 2014 K-1?
I recieved a K1 for svxy , after adjusting cost basis and entering all the info in turbo tax , the software is treating the gain on 1256 contracts and straddles as self employed income and generating self employment tax. Did anyone come across this . Please advise.
Hi,
I recieved a K1 for svxy , after adjusting cost basis and entering all the info in turbo tax , the software is treating the gain on 1256 contracts and straddles as self employed income and generating self employment tax. Did anyone come across this . Please advise.
Instructions for Form 6781 that deal with Section 1256 contracts states:
Options and commodities dealers
must take any gain or loss from the
trading of section 1256 contracts into
account in figuring net earnings subject
to self-employment tax.
Is there any reason why TurboTax would be classifying you as an options or commodities dealer?
What if your broker reports your cost basis to the IRS?I am not a tax expert but I do my own taxes - so go talk to a tax expert if you want to be confident in what you are doing. However, I bet a very few percentage of tax experts would know this stuff anyway. You'd probably have to go to a place that specializes in trading like GreenTraderTax.
That being said, this is how I would do it. You have to report the K-1 numbers, but these affect your cost basis. So if the K-1 shows a gain of $1,000, that means your cost basis is raised by $1,000 (you should see this in Box L of your K-1, Current year increase (decrease) - it would say $1,000). So supposing you got rid of all your SVXY shares, then on Schedule D (Form 8949) the reported cost basis would be $1,000 higher so it would counterbalance the profits on your K-1. Similary, if the K-1 shows a loss of $1,000, that means your cost basis is lowered by $1,000. You must keep track of your cost basis until you close out your SVXY position at which point you use that new cost basis on Schedule D (Form 8949). The important point is that even though you have to report the K-1 numbers, those are reflected in your cost basis so you aren't gaining or losing anything.
It may be different if you are not trading SVXY short-term, i.e., you do have to keep track of your cost basis until you sell the shares which can be complex if you are holding them long-term. Plus I believe there are other rules on cost basis but these generally only apply if you have held a security for a long time.
The way I like to think about it is if you just reported your SVXY trade without reporting the K-1 numbers (assuming you traded SVXY short-term and closed out the position by year end), then your tax liability would be correct. But the IRS is going to check for compliance on your K-1 so you have to match the numbers there but then transfer the opposite gain/loss to your cost basis. To make sure the IRS is able to match the transactions on your Schedule D (Form 8949), you should probably write out two entries - one for the trade reported by your brokerage and one that details the cost basis change. I.e., you want the IRS to be able to match the trades reported by your brokerage (and your brokerage has no clue what your K-1 says). If you paper file, I highly suggest writing a Notes Addendum section which details why you changed the cost basis for these trades and then on your tax return say something like "See Notes" where these cost basis changes happen.
In summary, it is just another example of red tape. And when you are short-term trading it just results in moving numbers around so that you can both satisfy your K-1 and Form 8949 reporting requirements simultaneously. But it should not affect your tax liability at all.