K-1 Information FAQs

Q: Why do I receive a Schedule K-1 rather than a Form 1099?

A: Since the above-listed 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.

The Funds as partnerships for tax purposes are "pass-through" entities. The income and expenses of each Fund "flow through" to its shareholders. (This differs from mutual funds and most exchange-traded funds that are registered as investment companies under the Investment Company Act of 1940, which pass through taxable income and capital gains in the form of distributions reported on a Form 1099.) Each shareholder in a Fund taxed as a partnership is directly responsible for reporting his or her pro rata portion of income, gains, losses, deductions or other taxable events in the Fund for the calendar year.

While shareholders may incur trading profits or losses through buying and selling shares of the Funds, shareholders also are subject to tax on their portion of any income or gains passed through by the Fund. In addition to income and gains, each Fund 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. For example:

• The Funds will earn income from debt securities and overnight investments. A shareholder’s pro rata portion of that income will be taxed at the shareholder’s ordinary income tax rate.
• The Funds will invest in a range of derivative instruments, including futures and forward contracts. In general, open futures positions will be marked to market, with their gains and losses reportable as 60% long-term and 40% short- term. The reporting of gains and losses may vary depending on the specifics of a futures contract.
• The Funds may also enter into swap agreements that generally produce capital gains/losses that are likely short-term in character.

Q: Why didn't I receive my Schedule K-1 by January 31st, which is the date required for distribution of Forms 1099?

A: The Funds try to provide the Schedule K-1 information by the second week of March, if possible. 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 the month of March. In general, the Funds are required to provide this information by March 15th, or September 15th, if an extension is requested. Historically, the Funds have issued K-1s electronically on or around March 1st for those shareholders who have selected electronic delivery. You can sign up for electronic delivery here.

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 shares of a Fund are held. Currently, it is the obligation of the Funds to provide the information directly to the shareholder. The Funds are not able to accommodate any special or duplicate mailing requests.

Q: If I purchased shares of the Fund, what is my tax reporting responsibility for this investment?

A: Income, gains, losses and expenses on the Fund shares are generally reported on the Schedule K-1 we send you and should be included on your tax return. How many shares you’ve held and the duration for which you’ve held them determines the portion of any income, gains or losses allocated to you through the K-1. Be sure to consult with a tax professional and/or your financial professional.

For tax years beginning after 2012, new Internal Revenue Code (“IRC”) Section 1411 imposes a 3.8% surtax on certain investment income of individuals and of trusts and estates. Your share of income reported on this Schedule K-1 and any gain on the sale of Partnership units may be subject to this surtax. The Partnership encourages you to consult your tax advisor concerning the impact of IRC Section 1411 to you.

Q: If I sold shares of a Fund, what is my tax reporting responsibility for this transaction?

A: Please consult a tax professional. Generally, your gain/loss on the sale of USCF fund shares must be included in your tax return. The sales schedule reflects sales of your shares and includes related adjustments to your tax basis.

Q: I didn't receive any cash distribution on my USCF fund shares. Why are there reportable items on my Schedule K-1 that are subject to tax?

A: Each shareholder in a Fund’s accounts for his or her pro rata portion of income or losses in the Funds on an annual basis—regardless of whether or not that income, gain or loss is distributed. How many shares you’ve held and the duration for which you’ve held them determines the portion of any income, gains or losses allocated to you through the K- 1.

The Funds file an annual information return and each shareholder is required to report on his/her U.S. federal income tax return his/her allocable share of the income, gain, loss and deduction of the USCF funds. The Funds have not made, and do not intend to make, any distributions; this means Fund shareholders are required to report their allocable share of income whether the income is distributed or not.

Q: Do I have to report a Schedule K-1 if my shares were held in a non-taxable account?

A: The reporting responsibility of a Schedule K-1 received for Fund shares held in a non- taxable account may differ than if held in a taxable account. Therefore, please consult with your tax advisor for more information.

Q: How is my tax basis determined for computing gain or loss?

A: Your tax basis is generally the original amount paid for shares of a Fund 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

Please consult a tax advisor.

Q: Will I get a K-1 if I only bought shares to cover a short position?

A: Covering a short position generally doesn’t generate a Schedule K-1. Some brokers may not distinguish between long and short positions when reporting transactions to the Fund’s tax accountants. If you received a Schedule K-1 due to covering a short position, please contact Tax Package Support at (877) 527-6403 for correction, if needed. Please note that our Tax Package Support staff is not qualified to give tax advice or answer questions regarding your particular tax situation.

Q: What if the information reported in my tax package is incorrect?

A: The tax calculations found within the tax package you received are based on purchase and sale information obtained from brokers and various reporting sources. If the information provided by these sources is incorrect, the information reported to you, as well as the information reported to the Internal Revenue Service, may also be incorrect. If your ownership records do not agree with the transactions reported on the Ownership Schedule contained in the tax package, please contact Tax Package Support at (877) 527-6403 to obtain a corrected K-1.

Q: Is any of the allocated income Unrelated Business Taxable Income (UBTI) to tax-exempt shareholders?

A: Not under current federal income tax laws.

Q: I have questions about the Schedule K-1. Where can I get help?

A: Shareholders with questions about the Schedule K-1 can visit each Fund’s tax package support website where you can:

• Sign up for an email alert to notify you when your tax package is available and eliminate paper K-1s.
• View your prior year tax schedules.
• Print your tax package, including instructions.
• Download a file of your Schedule K-1 information that can be imported into select tax software.
• Request changes to incorrect information.

Additional Questions? Call Tax Package Support toll free at (877) 527-6403.

Please note that our Tax Package Support staff is not qualified to give tax advice or answer questions regarding your particular tax situation. Please refer these questions to your tax advisor.