I just wanted to double-check even though this is probably a stupid question-- if you use options as stock substitution for MLPS, do you clear yourself of the K-1 liabilities, since your not holding ownership through shares, but betting off the shares using options?
I thought so, but wanted to verify before making a move. I'm interested in the price appreciation of the MLP names due to people scrambling for yield as the volatility built in because of their connection to oil/gas and overall market sentiment at times. I'm not here simply for the yield-- heck I can the same yield buying AT&T or verizon with much lower chances of the stock price collapsing because oil comes down. I'm interesting in "betting" on the price moving north as new projects are announced and more people buy the sector and the names through ETF's and a desire for the yield that is gettin pumped through the MLP-happy media.
A Short is basically Negative Equity for probably a very brief period of time, I am thinking something like an "Imaginary Number" that's really more a conceptual construct. I'm willing to bet a nickle that the answer is "NO" just because shorts are ordinarily only holding their position for about a week maximum, making the K-1 essentuially irrelevant. I guess that changes when we're dealing with longer periods of time. I would think traders qualify for special exemptions and they would get out of K-1s reporting requirements...
I bet you actually know the answer. You're one of the sharper and more sophisticated posters on multiple income boards.
Assuming a Short has to report K-1 info for taxes, how in the world is a short accounted for? Do MLP shorts need to pay distributions and therefore increase their basis by the increment.
This is just a weird topic you brought up. Anyways, have a great weekend and Memorial Day. WISE GUY