The DOL rule from all angles.

The Benefits of Revenue‐Weighted ETFs | OppenheimerFunds

Fiduciary Focus is your one-stop resource for learning how the DOL's fiduciary rule is changing the advice business. Find out which firms offer the highest payouts, have the most reps in the field and generate the most revenue - or create your own custom rankings. Before you change firms, make a new hire or explore an acquisition, visit the new InvestmentNews Adviser Center.

Track the latest teams of advisers and brokers changing firms and view recruiting activity at wirehouses, regional brokerages, RIAs and IBDs. This interactive, customizable tool allows you to view detailed data on compensation, staffing and financial performance practices from across the industry. A comprehensive study highlighting the best technology practices of both your peers and top-performing advisory firms.

Benchmark your business against the industry's best practices with the InvestmentNews Financial Performance Study of Advisory Firms. June 20, New York Prepare to be inspired at this event tailored to women working in the financial services industry.

July 11, Boston Nov. Check out the latest webcasts available covering the most important topics in the industry. Many qualify for CE credits. October 17, l Boston.

As they do with stocks, investors have the opportunity to trade listed options on many exchange-traded funds. You would think, therefore, that the taxation of gains and losses on ETF options should be straightforward.

Long-term gains are possible only after a holding period of one year or more. Most ETFs are corporations.

Some also are regulated investment companies, which is the formal name for a mutual fund. Like any other corporation, a RIC is liable for tax on its taxable income; the big difference is that the RIC is allowed to take a deduction for the dividends it pays to holders. These distributions usually reduce RIC taxable income to zero.

But not all ETFs are corporations or RICs. And publicly traded options on such ETFs are considered non-equity options and aren't taxed like equity options. Nonequity options are taxed under Internal Revenue Code Section similar to futures. This seems like a great deal for the short-term trader. The trade-off is that profits and losses are marked to market for tax purposes at the end of each fiscal year.

GainsKeeper: Blog

This Section treatment applies even if the investor is short the option. As a result of innovation in the ETF business, the legal structures of ETFs now vary widely. In addition to RICs, there are ETFs that are grantor trusts, U. Because there are publicly traded options on all these types of ETFs, investors must be wary. For tax purposes, the key is to ascertain the entity classification.

If the underlying legal structure is a corporation, the option is taxed normally. If the underlying legal structure is a not an equity, the option most likely will fall under the IRC Section regime. It should be noted that over-the-counter options, which don't trade on an exchange, don't get Section treatment and are taxed normally.

Sometimes, choosing the best type of option depends on an investor's expected time horizon. Consider the most popular gold ETF, SPDR Gold Trust Ticker: GLD , which is a grantor trust. Because of its structure, listed options on GLD are taxed as Section contracts. Investors can inspect the ETF's prospectus to ascertain the entity's classification.

ETFs on master limited partnerships are taxable corporations. Although they aren't RICs, their options are taxed normally. The most popular oil ETF is actually a commodities pool that trades futures; it is set up as a limited partnership.

Listed options on the oil ETF are thus nonequity options taxed as Section contracts. These taxation oddities can wind up being either traps for the unwary that are discovered next April when preparing a tax return or opportunities to exploit that allow your clients to keep more of their investment profits.

For a list of all ETFs and the tax treatment of their listed options, visit twenty-first.

Gordon is chief executive of Twenty-First Securities Corp. Stern School of Business. He can be reached at bob twenty-first. View comments Please enable JavaScript to view the comments powered by Disqus.

The complexity of ETF options

Join InvestmentNews at the 12th annual Retirement Income Summit - the industry's premier retirement planning conference. Much has changed - and much remains to be learned. Attend and discuss how the future is full of opportunity for Nextgen talent brings a diverse perspective and unique skills to the industry.

Find out why two Utah Valley University students are so excited to make a difference. Some question whether brokers will drop the CFP mark or if the CFP Board will strictly enforce its new standard. CFP Board revises its standards and aims to beef up fiduciary requirements of certificants.

Introducing 40 young leaders in financial advice. Learn how their passions are driving their success and fueling the future of the industry at large. With regulations and other factors changing the marketplace, the publicly traded REIT will focus on its core business in the net lease market.

The measure, effective July 1, requires advisers to disclose any "profit or commission" they receive and make a "diligent inquiry" about a client's financial condition and goals.

Register to access our archive of leading investment information and data. Use of editorial content without permission is strictly prohibited. Liz Skinner John Waggoner. The complexity of ETF options Key to ascertaining whether they will be taxed 'normally' lies in whether or not they are equities. Jun 19, Meet the class of 40 Under Ten actively managed stock funds with lots of cash — and a history of using it wisely.

CFPs, including brokers, may have to adhere to a stricter fiduciary duty.

Upcoming Event Apr Channels INTV Events Practice Makeover Smarter in 60 Seconds Secrets Behind Success Gadget Girl The Secret Life of CFPs, including brokers, may have to adhere to a stricter fiduciary duty CFP Board revises its standards and aims to beef up fiduciary requirements of certificants.

Meet our new 40 Under 40s Introducing 40 young leaders in financial advice. Carey exiting the nontraded REIT business With regulations and other factors changing the marketplace, the publicly traded REIT will focus on its core business in the net lease market. New Nevada law imposes fiduciary duty on brokers The measure, effective July 1, requires advisers to disclose any "profit or commission" they receive and make a "diligent inquiry" about a client's financial condition and goals.

Subscribe to Print Newsletter Sign-up Register. Connect with us Register to access our archive of leading investment information and data. Follow newsfromIN Follow eventsfromIN Follow statsfromIN. Follow InvestmentNews Financial Adviser Group Retirement Income Summit Group Alternative Investments Conference 40 Under Like us on Facebook Like our fan page to receive the latest news and opinion from InvestmentNews.

About Contact Staff Help Center Editorial Calendar Media Kit Reprints Content Strategy Studio. Paul Ryan reiterates goal to kill estate tax, maintain retirement-savings incentives. Fidelity launches funds that can make RMDs for aging baby boomers.