Schedule K-1

Did you receive a Schedule K-1 in the mail and not sure why you received it and why you received it so late? In short, when it comes to your trading account, a Schedule K-1 gets issued when you’ve traded or held shares of an underlying that is structured as a Partnership such as Limited Partnerships (LP) and Master Limited Partnership (MLP). 

What is a Schedule K-1?

When you hold shares of an underlying classified as a partnership, you are technically classified as a unitholder instead of a shareholder. As a result, any gain or loss from trading shares in a partnership, or distribution received from a partnership are treated differently than traditional equities or ETFs. Your K-1 lists any applicable gain, loss, or income from distribution.

How will I know if I am going to receive a Schedule K-1?

The best way to know if you’re trading or holding any shares in a partnership is to look at the symbol’s name in your trading platform or in your monthly statement. The most common partnerships are an LP or an MLP. If you see an LP or MLP at the end of the symbol’s name then you’re trading or holding shares in a partnership.

Why did I receive my Schedule K-1 so late?

Schedule K-1s are typically delivered after you receive your Consolidated 1099. As a unitholder, the investment company that operates the fund you held or traded or the company that’s structured as a partnership will issue the Schedule K-1 instead. As a result, your K-1 is not part of your Consolidated 1099 or any other tax forms issued by our clearing firm. Instead, you will receive it in the mail. 

Schedule K-1’s are generally mailed to unitholders in mid to late March but can vary based on the partnership. If you already filed your taxes and need to make an amendment, you may file a Form 1040-X with the IRS. For instructions, please click here.

Common Partnerships

Some common ETFs that are structured as a partnership are: