Q: I didn’t receive any cash distributionson my units/shares. Why are there reportable items on my Schedule K-1 that are subject to tax?
A: No U.S. federal income taxes are paid by the Funds. Instead, each Fund files an annual information return and each unitholder is required to report on its U.S. federal income tax return its allocable share of the income, gain, loss and deduction of the respective fund(s) that it has invested in. The General Partner has not made and does not intend to make any distributions; this means unitholders are required to report their allocable share of income whether the income is distributed or not.
Q: Why do I receive a Schedule K-1 rather than a Form 1099?
A: Since the Funds are treated as partnerships for U.S. Income Tax purposes, the information is required to be reported on a Schedule K-1 instead of a Form 1099.
Q: Why didn’t I receive my Schedule K-1 by January 31, which is the date required for distribution of Forms 1099?
A: The Funds strive to provide the Schedule K-1 information as early as possible, typically by the second week of March. The Funds must obtain information regarding ownership interests bought and sold during the year from brokers and nominees. Much of this information is not provided to the Funds until late January. This information is reviewed and then processed with other information resulting in printing and mailing during March. In general, the Funds are required to provide this information by April 15th, or September 15th if an extension is requested.
Q: Why doesn’t my financial advisor/accountant/broker receive this information for my account?
A: This information is only sent to the address associated with the account in which the units of the Funds are held. Currently, it is the obligation of the Funds to provide the information directly to the unitholder. The Funds are not able to accommodate any special or duplicate mailing requests.
Q: If I purchased fund shares, what is my tax reporting responsibility for this investment?
A: Please consult a tax professional. Generally, any income, capital gain/loss, expense and other items reported to you on the Schedule K-1 must be included in your tax return.
Q: If I sold fund shares, what is my tax reporting responsibility for this transaction?
A: Please consult a tax professional. Generally, your gain/loss on the sale of units must be included in your tax return. The Sales Schedule reflects sales of your units and includes related adjustments to your tax basis.
Q: How is my tax basis determined for computing gain or loss?
A: Your tax basis is generally the original amount paid for the partnership units adjusted as follows:
- Increased by the allocable share of income and gain reported to you on the Schedule K-1
- Reduced by the allocable share of expense and loss reported to you on the Schedule K-1
Again, you should consult a tax professional.
Q: Is any of the allocated income Unrelated Business Taxable Income (UBTI) to tax-exempt investors?
A: Not under current federal income tax laws.
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