Perhaps. The management/advisors for both ETFs have stated that that shareholders will receive a Schedule K-1. Many, if not all, shareholders that buy and sell these ETFs do so daily. In fact in the Prospectus that was sent in the previous post indicates that shareholders who invest in these ETFs should actively manage and monitor their investments, as frequently as daily. Given the leverage that both ETFs use, it is common for firms to recommend that their customers not hold these ETFs overnight.
The Funds are treated as partnerships for tax purposes, so an investor’s allocated share of a Fund’s income, gains, losses and deductions is reported on a Schedule K-1. Investors will not receive a Form 1099-DIV, issued by most mutual funds and other ETFs, which itemizes the taxable distributions received by the investor. As a result, your Schedule K-1 tax package may include a Sales Schedule which provides instructions on how to compute your gain or loss to fully reflect your experience as a shareholder and a partner of the Fund.
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