Tax Information Overview
Click Here to download your 2023 K-1s and K-3s.
Click Here to download your Quarterly Notice for IRS Section 1446(f)
IRS Section 1446(f) Rule Information
1446(f) rule is applicable to Publicly Traded Partnerships (PTPs) and may impact international investors in the following exchange-traded products (ETPs) registered under the Securities Act of 1933: USCI, USO, USL, BNO, UNG, UNL, UGA, CPER (together, the "USCF funds").
The IRS recently issued regulations on the withholding on transfers of interests in PTPs and on distributions made with respect to PTP interests, effective January 1, 2023. These regulations would require a 10% withholding on gains from the sale of PTP interests.
- An exception under this rule (the "10-percent exception") applies if a PTP is to certify that it is not engaged in a U.S. trade or business. In order to make this certification, the PTP must state on a qualified notice that the 10-percent exception applies. USCF intends to post a quarterly qualified notice to the USCF funds’ website indicating that it has met the requirements for this exception.
- Subpart (2) says the exception to the 10% withholding under 1.1446(f)‐4(b)(3)(ii) would apply where “The partnership was not engaged in a trade or business within the United States at any time during the taxable year of the partnership through the PTP designated date.”
- The quarterly qualified notices for the USCF funds will be posted to the Filings page.
This information may be used by foreign partners to indicate that the sale of their partnership interest should not be subject to the 10% withholding.
Schedule K-3s reflect items of international tax relevance. A limited number of shareholders (primarily foreign shareholders, shareholders computing a foreign tax credit on their tax return and certain corporate and/or partnership shareholders) may need the detailed information disclosed on Schedule K-3 for their specific reporting requirements. To the extent Schedule K-3 is applicable to your federal income tax return filing needs, we encourage you to review the information contained on this form and refer to the appropriate federal laws and guidance or consult with your tax advisor.
To receive an electronic copy of your Schedule K-3 via email, shareholders may call Tax Package Support toll free at (877) 527-6403.
Q: Why do I receive a Schedule K-1 rather than a Form 1099?
A: Since the USCF 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.
USCF ETPs that issue K-1s and K-3s include:
- United States Commodity Index Fund (USCI)
- United States Oil Fund, LP (USO)
- United States 12 Month Oil Fund, LP (USL)
- United States Brent Oil Fund, LP (BNO)
- United States Natural Gas Fund, LP (UNG)
- United States 12 Month Natural Gas Fund, LP (UNL)
- United States Gasoline Fund, LP (UGA)
- United States Copper Index Fund (CPER)
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 USCF 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 the month of March. In general, the USCF funds are required to provide this information by March 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 shares of a USCF fund are held. Currently, it is the obligation of the funds to provide the information directly to the shareholder. The USCF funds are not able to accommodate any special or duplicate mailing requests.
Q: If I purchased USCF 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 USCF 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 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: No. U.S. federal income taxes are paid by the USCF funds. Instead, 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 USCF 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: How is my tax basis determined for computing gain or loss?
A: Your tax basis is generally the original amount paid for the USCF fund shares 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 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.
Additional Questions? Call Tax Package Support toll free at (877) 527-6403.