Do I need to file both 1099-B and Schedule K-1 (Form 1065) for ETF trades? Software says claiming 1099-B capital gains is sufficient
So I've been dabbling in energy ETFs for the past year and traded ProShares Ultra Bloomberg Natural Gas (BOIL) and its inverse KOLD. Just got my tax documents and I'm confused. The brokerage sent me a 1099-B showing my capital gains/losses from the trades, but I also received a Schedule K-1 (Form 1065) from the fund itself. My tax software (using TurboTax) is telling me that as long as I enter the capital gains information from the 1099-B, I should be good and don't need to also enter the K-1 data to avoid double-counting the same transactions. This seems weird to me since I have both forms. Anyone dealt with this before? I'm worried about getting flagged for not reporting everything properly. The K-1 has all these partnership income breakdowns that aren't on the 1099-B. This is my first time dealing with an ETF that issues K-1s and I'm completely lost.
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Zara Perez
This is actually a common confusion with certain ETFs that are structured as partnerships. Here's what's happening: The 1099-B from your broker shows the capital gains/losses from buying and selling the ETF shares themselves. This reports your personal trading activity. The K-1 (Form 1065) is issued because funds like BOIL and KOLD are actually structured as partnerships for tax purposes. The K-1 reports your share of the partnership's income, deductions, credits, etc. - essentially the internal activities of the fund that flow through to you as a "partner." You actually need to report BOTH, but they're reporting different things. The 1099-B reports your personal trading gains/losses, while the K-1 reports your share of the partnership's internal activities. Your tax software is incorrect if it's telling you to ignore the K-1 completely. Enter the K-1 information separately from your 1099-B. The software should handle them differently and not double-count anything. If you're concerned, you might want to consult with a tax professional who has experience with partnership investments.
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Daniel Rogers
•Wait so even if I held the ETF for like 2 weeks total, I still need to deal with the K-1? I thought those were only if you had some long-term investment in a partnership. How much of a difference does it usually make to your total tax? Is it worth paying someone to handle this?
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Zara Perez
•Yes, even if you only held the ETF for 2 weeks, you still need to deal with the K-1. The length of time you held the investment doesn't matter - what matters is that you were technically a "partner" in the fund during that period, so you're allocated your proportional share of the partnership's income and expenses for that time. How much difference it makes depends entirely on the specific numbers on your K-1. Sometimes it might only change your tax liability by a small amount, but other times it could be significant. The K-1 might include ordinary income, interest, dividends, capital gains, foreign taxes paid, and various deductions that aren't reflected on your 1099-B at all.
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Aaliyah Reed
After dealing with this exact issue last year, I found this amazing tool called taxr.ai (https://taxr.ai) that saved me hours of headache with K-1 forms. I was trading BOIL and a few other ETFs that issued K-1s and was super confused about how to handle everything properly. The software I was using kept giving me weird results when I entered both the 1099-B and K-1 information. What taxr.ai did was analyze both forms, identify exactly what needed to be reported where, and gave me clear guidance on how to properly enter everything to avoid both double-counting and missing anything important. It was particularly helpful with figuring out how the partnership income on the K-1 needed to be reported separately from the capital gains on the 1099-B, which my regular tax software wasn't explaining well.
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Ella Russell
•Does it work if you have multiple K-1s from different funds? I've got like 3 different ones this year plus regular stock trading and I'm about ready to just pay someone to deal with this mess.
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Mohammed Khan
•I'm skeptical about using third-party tools for something this important. How does it actually work? Do you upload your tax documents to them or something? Not sure I'm comfortable with that.
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Aaliyah Reed
•It absolutely handles multiple K-1s from different funds. That's actually where it really shines because it can identify patterns across different partnership investments and help you understand the aggregate impact. It's a huge time-saver compared to trying to manually figure out each one. The way it works is you upload your tax documents securely, and their system uses AI to extract and analyze the information. Everything is encrypted and they have bank-level security measures in place. I was hesitant at first too, but they explain their security protocols on their site, and they don't store your documents longer than needed for processing. I found the peace of mind worth it compared to potentially filing incorrectly.
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Ella Russell
Just wanted to follow up after using taxr.ai for my ETF mess. WOW what a difference! I uploaded my three different K-1 forms and all my 1099s, and it broke everything down perfectly. It even caught that one of my K-1s had foreign income that qualified for foreign tax credit that I would have completely missed. The step-by-step instructions for entering everything into my tax software were super clear, and it explained exactly why I needed to report both the 1099-B and K-1 information but in different sections. Turns out my K-1s added about $580 to my tax bill that I would have missed if I had just ignored them like my tax software initially suggested. Definitely worth it for anyone dealing with these partnership ETFs. Saved me from what could have been a painful audit later.
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Gavin King
If you're struggling to get clarity on your K-1 and 1099-B situation, I'd recommend trying Claimyr (https://claimyr.com). I was in the same boat last year and spent DAYS trying to get through to the IRS for guidance. Their lines were always busy or had 2+ hour wait times. Claimyr got me connected to an actual IRS agent in about 20 minutes who walked me through exactly how to handle my ETF investments that issued K-1s. They use some system to navigate the IRS phone tree and hold in line for you, then call you when they've got an agent on the line. You can see how it works in this demo: https://youtu.be/_kiP6q8DX5c The agent confirmed I needed to report both forms and explained the proper way to enter everything to avoid problems. Honestly, getting direct confirmation from the IRS gave me peace of mind that I was doing everything right.
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Nathan Kim
•How much does this cost? Seems too good to be true that they can just magically get through to the IRS when no one else can. I've tried calling like 5 times this month already.
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Mohammed Khan
•This sounds like a scam. How would some random service have better access to the IRS than anyone else? And why would you trust them with your personal tax information?
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Gavin King
•They don't charge anything until they actually get you connected with an IRS agent. Their system basically automates the process of navigating the phone menus and waiting on hold, which is why they can get through more efficiently. They're not doing anything magical - just taking the painful waiting part off your plate. They actually don't need or ask for any of your personal tax information. All they do is connect the call - once the IRS agent is on the line, they call you and connect you directly. You're the one who discusses your specific tax situation with the IRS agent, not Claimyr. I was skeptical too until I watched their demo video and saw how straightforward the process is.
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Mohammed Khan
I need to eat my words about Claimyr. After my skeptical comment, I was still desperate for answers about my K-1 forms, so I decided to give it a shot. I figured I had nothing to lose. To my complete surprise, I got a call back in about 40 minutes with an actual IRS representative on the line! They confirmed what others here have said - yes, you need to report both the 1099-B and the K-1, and they're for different aspects of the investment. The IRS agent even explained that my particular ETF (also BOIL, coincidentally) had some ordinary business income that I needed to report separately from the capital gains/losses of my trades. This would have been completely missed if I had only reported the 1099-B. For anyone stuck in this situation and needing authoritative answers, getting through to an actual IRS agent made all the difference. Can't believe I wasted hours trying to call them directly before this.
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Eleanor Foster
I'm a bit late to this thread but wanted to add my experience. Those commodity ETFs like BOIL and KOLD are such a pain tax-wise! I deliberately stopped trading them because of the K-1 headache. If you want similar exposure without the K-1 hassle, consider using the futures-based ETFs that are structured as regulated investment companies (RICs) instead of partnerships. Funds like USO, UNG, or even some of the leveraged ones like GASL/GASX don't issue K-1s - they just send a normal 1099-DIV. The tax treatment is much simpler and you avoid all this partnership reporting mess altogether. Just something to consider for future trading!
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Benjamin Johnson
•Thank you for this tip! I didn't realize there were alternative ETFs that tracked similar things but had simpler tax treatment. Are there any performance differences between the K-1 issuing ETFs vs the 1099 ones? Or is it purely a tax structure thing?
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Eleanor Foster
•The performance can definitely differ between them, but it's not necessarily because of the tax structure. It's more about how the funds are managed and what specifically they're tracking. For example, BOIL uses futures contracts to provide 2x leveraged exposure to natural gas, while something like UNG provides unleveraged exposure using similar methods but is structured differently for tax purposes. The futures-based ETFs that send 1099s instead of K-1s often have slightly higher expense ratios to cover the additional corporate-level taxes they pay, but many traders find that small cost difference worth it to avoid the K-1 complexity. Just make sure to check the fund's prospectus before investing to confirm it doesn't issue K-1s.
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Lucas Turner
Just wanna check I'm understanding this correctly. If my brokerage sends me a 1099-B showing I made $2,000 profit trading BOIL, but the K-1 shows $500 in ordinary income from the partnership, I need to report BOTH the $2,000 capital gain AND the $500 ordinary income? That seems like double taxation on the same investment. What am I missing here?
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Zara Perez
•You're not being double-taxed! They're actually two different types of income from the same investment. The $2,000 profit on your 1099-B represents your personal gain from buying the ETF at one price and selling it at a higher price. This is your capital gain from trading. The $500 on the K-1 represents your share of the income that the partnership (the ETF itself) earned internally during the time you owned it - this might be from things like interest, dividends, or trading profits that the fund itself generated. This is ordinary income that "flows through" to you as a partner. They're completely separate income streams from the same investment, which is why they need to be reported separately. It's like if you owned a rental property - you'd report both the rental income you received during ownership AND any capital gain when you eventually sold the property.
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Lucas Turner
•Ok that makes more sense. So the $500 on the K-1 is basically what the fund earned internally while I was holding it, and the $2,000 on the 1099-B is what I made personally from buying low and selling high. Different income sources from the same investment. I'm still annoyed nobody warns you about this tax complexity before you buy these things! My broker never mentioned I'd be getting a K-1.
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Micah Franklin
You're absolutely right that brokers should warn investors about K-1 complexity! It's actually required disclosure, but it's usually buried deep in the prospectus that most people don't read. Here's a pro tip for future ETF investing: Before buying any commodity or futures-based ETF, check the fund's website for their "tax information" section. If they mention issuing Schedule K-1s, you'll know what you're getting into. You can also look at the fund structure - if it says "LP" (Limited Partnership) anywhere, that's your red flag for K-1s. Most major brokers also have a filter in their research tools to exclude partnerships if you want to avoid K-1s entirely. It's under the "fund structure" or "tax structure" filters when screening ETFs. The good news is that once you've dealt with it once, it gets easier. And honestly, the extra tax complexity is often worth it for the specific exposure these funds provide - you just need to factor in the additional tax prep time/cost when deciding if the investment makes sense for your situation.
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Ethan Clark
•This is really helpful advice! I wish I had known about checking for "LP" in the fund structure before I started trading these ETFs. Quick question - do all commodity ETFs issue K-1s, or are there some that are structured differently? I'm thinking about diversifying into other commodities but want to avoid the K-1 headache if possible. Also, when you mention the broker filters for excluding partnerships, do you know if that's available on most major platforms like Fidelity, Schwab, TD Ameritrade? I've been using Robinhood mostly and I don't think they have those advanced screening tools.
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