I have a client who is a very successful swing trader. That is, he profits from consistently knowing when a given stock is going to go up or down a little bit. He is contemplating a series of buys sells shorts and covers with a stock and then he realized it is a publicly traded partnership and he checked with me on the tax consequences. Does anyone know if a PTP differs from a garden variety stock in this regard?
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Ptp:
The only difference I can think of is that he would get a K-1 rather than a 1099DIV, and would probably need to report any K-1 income and expenses in the appropriate places. If he bought and sold it quickly enough, he might have no K-1 income and would only have a gain or loss on the sale.Originally posted by erchess View Post -
This is only a question, since I am not sure whether I know, but aren't some of partnership K-1's generated with income items allocated to partners based upon the periods (days) of ownership of partnership interest? Or is that the same with a publicly traded partnership?Originally posted by taxxcpa View PostComment
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Allocated ownership
That could be. But if it is publicly traded, it would be a very difficult task for the partnership to allocate the ownership and K-1 income to someone who held 100 shares for one or two days when there are a million owners. I've owned PTPs in my IRA, but don't remember if the K-1 considered anything except whether I owned it at year-end.Originally posted by OtisMozzetti View Post
Recently I bough a lot of MLP-type investments in my IRA and will see if they allocate it for the period owned when I get my K-1s.Comment
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think they always give an attached schedule that shows changes in ownership quanities. they do not show gain or loss that is up to the preparer. Basis especially in oil/gas is up to the preparer to figure, it will never match the K-1 summary.Comment
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