How do I report Schedule K-1 Form 1065 from US ETF on my T1?

[Quimby]

Hello All,

I purchased two Invesco PowerShares ETFs in 2010 and recently discovered that they are in fact partnerships, much to my surprise and irritation.

Consequently, I have received two Schedule K-1 Form 1065s from Deutsche Bank. By way of context, I am a dual citizen who has been living in Canada my entire life, and file both a 1040 and a T1. While TurboTax USA has no difficulty flowing through the two 1065 forms, TurboTax Canada appears to be of no help in this whatsoever.

The two Schedule K-1 1065 forms indicate the following:

Form 1:

5 Interest income 45
8 Net short-term capital gain (loss) -89
9a Net long-term capital gain (loss) 6
11 Other income (loss) 1,899 (C) corresponds to Sec. 1256 contracts & straddles
13 Other deductions 299 (K) corresponds to Deductions Portfolio (2% Floor)
20 Other information 45 (A) corresponds to Investment Income
20 Other information 299 (B) corresponds to Investment Expenses

Form 2:

5 Interest income 15
8 Net short-term capital gain (loss) 15
9a Net long-term capital gain (loss) 0
11 Other income (loss) -475 (C) corresponds to Sec. 1256 contracts & straddles
13 Other deductions 80 (K) corresponds to Deductions Portfolio (2% Floor)
20 Other information 15 (A) corresponds to Investment Income
20 Other information 80 (B) corresponds to Investment Expenses

Can anyone help me to map these items to my T1?

Thanks in advance for your assistance with this, and if anyone else can avoid falling into this trap as a result of this thread, so much the better. Always read the prospectus carefully - I wish that I had.

All the best,

Quimby

[Quimby]

Nelson,

I intend to outsource the entire filing process to an accountant next year, but for 2010 these K-1s are the last piece that I haven't been able to resolve. I know that it's quite late in the day to be asking for help, but I'd really appreciate your expertise and would gladly compensate you for your time.

Thanks also for the invaluable assistance that you've provided me in the past, both in responding to my own threads and those of others.

Quimby_CFA@yahoo.com

[nelsona]

Sorry,

Maybe someone else will jump in.

[JGCA]

Attach the k-1 copies to your T1

Report int income as int income
cap gains or loss as cpa gain or loss including sec 1256 contracts
other income as interest
convert to CND at 1.03

The amounts are not huge, you report them as close as possible in teh catagory they relate to on teh T1 and thats it the whole process given only 2 slips and teh amont in question is not a major feast, declare them and lets move on.

[Quimby]

JG,

Thanks so much for jumping in – I really appreciate it.

Just to be confirm, I’ll be summing the short-term capital gains, long-term capital gains, and Section 1256 contract mark to market gains and reporting these on line 132 of my T1 Schedule 3, while leaving line 131 blank?

Also, may I include (i.e. deduct) the amount listed in the K-1 form on line 20 (Investment Expenses) under Carrying Charges on line 221 of my T1 Schedule 4?

Thanks again,

Quimby

[JGCA]

yes try to match them as close as possible, other deductions to carrying charges and cap gains to cap gains including sec 1256 and other cpa gains and losses in Canada no distinction as you know between long and short term cap gains so its not an issue on 1256 cap gains.