UNG, USO & income taxes

Discussion in 'Trading' started by querobuscar, May 15, 2009.

  1. I have read that since UNG, USO and some other ETFs are structured as LLPs, they can be a pain as far as filing income taxes at the end of the year.
    AlsoI did a few trades of DBA during 2008 in my IRA and got a bunch of nasty looking paperwork about it concerning taxes. Per Yahoo Finance, USO and UNG are ETFs which in their profiesare described at "LP"s, but DBA is just listed as an EFT which is a "fund".
    Doesn't this tax problem go away if they are used for swing trading in an IRA account?
  2. piezoe


  3. In an IRA, everything is tax deferred.. until you withdraw funds.... taxed as ordinary income.
  4. I through everything in an envelope and ignore any IRA K-1 crap, it should just "go away"!
  5. I thought so, but just wanted to be sure.
  6. Not true. I am just now going out the door, but there are some cases where you have to pay even in an IRA. I think there are limits on how much you can earn tax free on MLP's for instance.

    Maybe an accountant can weigh in before I get back and have to Google for details.
  7. Pascal


    If you're day trading it, you don't have to deal with this BS. But if you are holding it long term, then you have to.
  8. yonisin


    I'm a few years away from being a paid tax preparer, but generally speaking, they are no tax consequences until you withdraw from an IRA.

    It's all taxable as ordinary income. The downside is that you forgo long-term capital gains treatment, favorable dividends treatment. And even if you have a loss, the funds you withdraw are still taxed as if were profitable ordinary income.
  9. Found it:


    Therefore, MLPs held in IRAs receive special tax treatment. If an MLP is held within a tax-deferred account, the investor must calculate what is called the unrelated business taxable income of the MLP. If the UBTI exceeds $1,000 in a tax-deferred account, the excess generally is subject to tax. Because of the complexity of the calculation and the additional tax, it is best to avoid holding an MLP in an IRA.
  10. Well, thanks again, Elliot.
    After having been audited once for a totally different issue, I'll play it safe and stay away from MLPs.
    #10     May 15, 2009