I've owned FUN for probably 10yrs now, and I don't think I've ever gotten a 1099-div, or ever reported anything on my taxes. Does anyone else get a 1099-div for FUN? Anyone have some insight for me? Thanks.
Ohhh, yeah, that's what I get. A quick googling of that makes it seem like I don't have to report the K-1.
Here is what Cedar Fair says about its K-1s:
What is different about the dividend that Cedar Fair pays and the dividend that a mutual fund pays? Both make you money. Why is Cedar Fair's tax exempt?
Cedar Fair is a partnership. Partnerships (along with limited liability companies and s-corporations) do not pay income taxes at the entity level. Owners pay income taxes on the income of the entity (the income "passes through" to the owners). Avoids double taxation which occurs in non-s-corporations (corporation pays income taxes on its income and shareholders pay taxes on dividends received from corporation).
So with a partnership, the partners pay income taxes on the income of the partnership. K-1 received by partners (unitholders) reflects that partner's/unitholder's share of the income and expenses of the partnership. Partner pays income taxes on his/her share of the net income of the partnership.
Distributions received by the partner/unitholder are not typically taxable (unless the distribution reduces your tax basis to $0 -- your tax basis is basically what you paid for the units plus your share of net income of the partnership).
There are rules which apply to passive partnership interests and active partnership interests. Most CF investors are passive investors.
An investor is not taxed on the income of a mutual fund. Only on what the mutual fund actually pays out in dividends (many times stock dividends which are reinvested in more shares of the mutual fund).
If the partnership units or mutual fund are held in a tax deferred account (such as an IRA), the income (share of partnership income or dividends from the mutual fund) are not currently taxable. That income grows tax free until withdrawn from the retirement account.
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