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Whiting USA Trust II (WHZ) Message Board

  • derynos derynos Mar 3, 2014 5:24 PM Flag

    2013 Tax returns

    I am unsure about what I am told on this for reporting the payouts on WHZ. Please help! Question:
    The 1099 Form item "Original issue discount" or OID.
    Is this really to be reported as interest income, regarded as part of the distributions received?
    Thanks .

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    • part of the payment is OID interest, yes.
      A bigger part is return of principal reported on schedule D with basis equal proceeds.
      It's all in the tax booklet.

    • azusa755 Mar 5, 2014 1:09 PM Flag

      While doing my taxes something looked strange on whz so I called my broker and he researched it and found out that the dividends I have received this year is my own money paid back to me. In other words they are not truly dividends and you should not report them as such. You are just getting back what you paid them and according to my broker in the year 2000 something they will close this fund and you will get nothing for it. What a rip off. I sold immediately.

      • 1 Reply to azusa755
      • Azusa, thanks for your input, but it is much more compicated than you (or your broker) realise.
        It is possible to make good profits trading the shares of this sort of trust and also using the built-in tax advantages to deal with the distributions.
        If you care to Google the text of my question you will see how opaquely Byzantine the IRS rules can become!
        In posting my question, I was hoping some of our members could share their recent input from an expensive Tax consultant!
        Yes indeed some of a distribution is a non-taxable return of capital, but that is only the start of the answer, which includes more means of reducing the taxability of payout.

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