On August 7, 2018, the board of directors of United States Commodity Funds LLC (“USCF”), the general partner of the United States Short Oil Fund, LP (“DNO”), determined that DNO could not continue its business and operations in an economically efficient manner due to DNO's inability to attract sufficient assets, thereby hindering its ability to operate efficiently. On that date, the Board of Directors of USCF also authorized and approved the closing and liquidation of DNO together with a plan of liquidation for DNO. DNO filed a current report on Form 8-K dated August 8, 2018 with the U.S. Securities and Exchange Commission (“SEC”) that included, as an exhibit a press release, the DNO plan of liquidation and a copy of the notice of required withdrawal from the limited partnership sent to shareholders. DNO also filed a prospectus supplement with the SEC dated August 8, 2018 that is available on USCF's website at www.uscfinvestments.com.
On September 6, 2018, DNO began the process of liquidating its portfolio. As of the close of regular trading on the NYSE Arca, Inc. (“NYSE Arca”), on September 6, 2018, DNO ceased accepting orders for Creation Baskets and Redemption Baskets from authorized participants. Trading in the shares of DNO on the NYSE Arca was suspended prior to the open of the market on September 7, 2018. On September 7, 2018, DNO filed a post-effective amendment to the registration statement with the SEC to terminate the offering of registered and unsold shares of DNO. The liquidation date for DNO was September 12, 2018 and the proceeds of the liquidation were sent to all remaining shareholders of DNO on or about September 13, 2018.
For U.S. federal income tax purposes, these distributions were treated as liquidating distributions and shareholders recognized gain or loss based on the difference between the amount of cash received as part of the liquidating distribution and their adjusted basis in their shares (taking into account all allocations of income, gain, loss, or deduction for the year of liquidation). Items of income, gain, loss, or deduction recognized as a result of the liquidation of DNO's portfolio were allocated for U.S. federal tax purposes to the shareholders. Any other items of income, gain, loss, or deduction not attributable to the liquidation of DNO's portfolio were allocated for U.S. federal income tax purposes in accordance with DNO's general allocation conventions. For further information concerning the U.S. federal income tax consequences of acquiring, holding, and disposing of shares, please review the section titled “U.S. Federal Income Tax Considerations” in the Prospectus. In addition, shareholders are encouraged to consult their own tax advisors concerning the impact of the liquidation of DNO in light of their own unique circumstances.