This week the Position Holder Trust and the IRA Partnership distributed tax documents for the 2016 tax year. These documents cover the time period from December 9, 2016 (the Effective Date of the Plan) to December 31, 2016. Neither the Position Holder Trust nor the IRA Partnership had taxable income in 2016.
We cannot provide you with tax, financial, or legal advice. For a more detailed discussion of the Plan’s tax consequences, you should refer to Article XXVI of the Disclosure Statement, dated June 22, 2016, which is available on the Plan Documents page. We encourage you to review the tax documents you received and the Disclosure Statement with your tax advisor.
Position Holder Trust
The Position Holder Trust issued grantor trust statements. These statements show the investor’s share of the Trust’s income and deductible expenses. Most of the statements will simply state “No taxable income” as the Trust had no taxable income and the investor’s share of the Trust’s deductible expenses was less than $1. Investors with larger shares in the Trust will receive statements identifying deductible expenses.
The IRA Partnership issued K-1s to its members. The K-1 shows the investor’s share of the Partnership’s income and deductible expenses. There are two areas of the K-1 that require some explanation.
The percentage interest in the IRA Partnership shown in Section J is calculated by dividing the total number of units that the investor (or its IRA) owns in the Partnership by the total number of outstanding Partnership Units.
The amount of capital shown in Section L is the value of the investor’s share (based on the percentage interest shown in Section J) of the assets that the Partnership contributed to the Position Holder Trust. The change reflects the gain or loss in value from December 9, 2016 to December 31, 2016. Section L does NOT reflect the investor’s tax basis or the amount that the investor invested in LPI.
Investors whose IRA Partnership units are held in their IRAs should send a copy of the K-1 to their IRA Custodians. We are preparing a data feed for all of the Custodians as well.