Bitcoin covered-call ETF income calculator
Here is how the math works on a bitcoin covered-call fund's payout: what a year of it comes to, what part of it is income this year, what part comes back later as basis, and why the number on the notice is not the number on the 1099.
Results appear here once shares and cost basis are filled in. The arithmetic runs in the browser and stores nothing.
- Ordinary income slice (taxed now)
- Federal tax on the ordinary slice
- After tax this year
No tax now. The whole eventual withdrawal is ordinary income (Publication 590-B), so the fund's character is erased and the range does nothing.
No tax on a qualified distribution. Two 5-year clocks apply: one from the first Roth contribution, and a separate one from each conversion. The range does nothing here either.
Show basis erosion and the rest
- Return-of-capital slice (untaxed now, reduces basis)
- Net investment income tax
- Basis per share after one year
- Years to zero basis at this pace
- Return of capital past zero basis this year, taxed as gain
Once basis reaches zero, further return of capital is gain from the sale or exchange of property under section 301(c)(3)(A), long or short by holding period.[16]
Shares held in a margin account can be lent out. A substitute payment that arrives instead of the distribution is reported as other income on Form 1099-MISC, not as a dividend, and the IRS names a return-of-capital distribution among the payments a substitute can stand in for (Publication 550). What a substitute payment does to basis is not stated in any fetched document and is not modelled here.
Why the estimate is not the 1099
Every one of these funds mails a return-of-capital estimate with each payment. Here is what the estimate was worth, three times, in the issuers' own documents.
The July 2024 notice estimated the whole payment was return of capital. The audited 2024 statement reports the year's distributions as ordinary income and a dash for return of capital.
The July 2025 notice estimated the distribution at this share return of capital. Form 8937 finalised the same distribution at the second figure.
Nothing above is final. The character of 2026 distributions arrives on Form 1099-DIV, box 3, due to holders by January 31, 2027; until then every return-of-capital figure is an estimate the issuer may revise.
Assumptions
- A US individual holding the shares directly. One position, one fund, one year.
- Annual distributions assume the latest declared payment repeats every period: twelve monthly or fifty-two weekly payments. No fund promises the next payment, and every fund in the table has cut one.
- The return-of-capital range is the reader's own. The default bracket is this site's editorial choice around the audited periods in the table below; it predicts nothing.
- One marginal rate, typed by the reader, is applied to the whole ordinary slice. No bracket table, no standard deduction, no state tax.
- The net investment income tax, when ticked, is applied to the whole ordinary slice at the statutory rate. The thresholds are printed in the methodology and not tested here.
- Return of capital is untaxed this year and reduces basis. That is deferral, not exemption: it comes back as gain when the shares are sold or the basis reaches zero.
- Basis erosion holds the payment and the range constant for as many years as it takes. It is arithmetic, not a forecast.
- Estimates only. The 1099-DIV, the basis records, and the filing are the reader's own.
Verify with a CPA before filing.
The fund's own figures, with their dates
- Fund
- NEOS Bitcoin High Income ETF (NEOS)
- Distribution frequency
- monthly as of 2026-07-31[1]
- Latest declared distribution per share
- $0.6289 as of 2026-08-18[1]
- 30-day SEC yield (what the fund earned, net of fees)
- 1.62% as of 2026-07-31[1]
- Headline distribution rate (one payment, annualised)
- 26.73% as of 2026-07-31[1]
- Expense ratio
- 0.99% as of 2026-09-01[1]
- Net asset value per share
- $31.96 as of 2026-09-01[1]
- Fund
- YieldMax MSTR Option Income Strategy ETF (YieldMax)
- Distribution frequency
- weekly as of 2026-08-31[2]
- Latest declared distribution per share
- $0.2836 as of 2026-08-26[2]
- 30-day SEC yield (what the fund earned, net of fees)
- 1.74% as of 2026-08-31[2]
- Headline distribution rate (one payment, annualised)
- 100.15% as of 2026-08-26[2]
- Expense ratio
- 1.03% as of 2026-08-31[2]
- Net asset value per share
- $15.35 as of 2026-08-31[2]
- Fund
- YieldMax Bitcoin Option Income Strategy ETF (YieldMax)
- Distribution frequency
- weekly as of 2026-08-31[3]
- Latest declared distribution per share
- $0.2712 as of 2026-08-26[3]
- 30-day SEC yield (what the fund earned, net of fees)
- 2.17% as of 2026-08-31[3]
- Headline distribution rate (one payment, annualised)
- 65.29% as of 2026-08-26[3]
- Expense ratio
- 1.02% as of 2026-08-31[3]
- Net asset value per share
- $21.24 as of 2026-08-31[3]
- Fund
- Roundhill Bitcoin Covered Call Strategy ETF (Roundhill)
- Distribution frequency
- weekly as of 2026-06-30[6]
- Latest declared distribution per share
- $0.101896 as of 2026-09-02[4]
- 30-day SEC yield (what the fund earned, net of fees)
- not verified
- Headline distribution rate (one payment, annualised)
- not verified
- Expense ratio
- 0.96% as of 2026-06-30[6]
- Net asset value per share
- $17.89 as of 2026-09-01[5]
The headline rate and the SEC yield are printed together on purpose. The first annualises one payment against one NAV; the second is what the fund earned over a month, net of fees. Neither is a forecast, and neither is the fund's return.
Audited, not a projection: net asset value per share
No fund in the set publishes a price-only return, so the erosion evidence is the audited series. Total return counts the distributions as reinvested; the NAV column is what a share was worth before them. MSTY and YBIT figures are on the post-reverse-split basis their own reports use.
| Fund | Period | NAV, start | NAV, end | Distributions per share | Of which return of capital | Reported total return | Source |
|---|---|---|---|---|---|---|---|
| BTCI | inception (2024-10-17) to 2025-05-31 | $50.00 | $58.95 | $11.10 | $6.51 | 43.24% | [10] |
| BTCI | 2025-06-01 to 2025-12-31 | $58.95 | $43.97 | $8.94 | $3.97 | −12.50% | [10] |
| BTCI | six months to 2026-06-30 (unaudited) | $43.97 | $26.85 | $4.83 | — | −30.14% | [11] |
| MSTY | inception (2024-02-21) to 2024-10-31 | $100.00 | $145.30 | $100.05 | — | 188.30% | [9] |
| MSTY | fiscal year ended 2025-10-31 | $145.30 | $54.39 | $119.48 | $114.09 | 4.95% | [9] |
| YBIT | inception (2024-04-22) to 2024-10-31 | $100.00 | $63.75 | $27.25 | $26.10 | -7.26% | [9] |
| YBIT | fiscal year ended 2025-10-31 | $63.75 | $44.02 | $36.66 | $25.51 | 31.22% | [9] |
| YBTC | inception (2024-01-17) to 2024-12-31 | $50.17 | $49.32 | $22.15 | — | 52.74% | [8] |
| YBTC | fiscal year ended 2025-12-31 | $49.32 | $28.42 | $21.63 | $16.04 | −3.45% | [8] |
What the audited statements say the payments were
Fund-level dollars from each annual report. A dash is the report's own dash. The last column is computed here from the row's own figures and is labelled computed; no source states it. This is the evidence behind the default range above.
| Fund | Period | Ordinary income | Capital gain | Return of capital | Return-of-capital share (computed) | Source |
|---|---|---|---|---|---|---|
| BTCI | fiscal year ended 2025-05-31 | $2,638,033 | — | $15,661,431 | 85.6% computed | [10] |
| BTCI | seven months ended 2025-12-31 | $61,072,056 | — | $48,893,912 | 44.5% computed | [10] |
| MSTY | fiscal year ended 2024-10-31 | $247,274,410 | — | — | — | [9] |
| MSTY | fiscal year ended 2025-10-31 | $144,166,337 | — | $3,054,672,201 | 95.5% computed | [9] |
| YBIT | fiscal year ended 2024-10-31 | $687,940 | — | $15,428,412 | 95.7% computed | [9] |
| YBIT | fiscal year ended 2025-10-31 | $13,243,337 | $10,428,946 | $54,152,615 | 69.6% computed | [9] |
| YBTC | fiscal year ended 2024-12-31 | $15,307,183 | — | — | — | [8] |
| YBTC | fiscal year ended 2025-12-31 | $28,652,228 | — | $82,216,744 | 74.2% computed | [8] |
Unresolved conflict, printed rather than explained: BTCI's unaudited statement for the six months to 2026-06-30 reports every dollar distributed as ordinary income and a dash for return of capital, while the fund's own six notices for those months estimated most of each payment as return of capital. NEOS publishes no sentence reconciling the two, and this page does not infer one.
What this page cannot tell you
- The return-of-capital share of next year's payments. It is a year-end residual under section 316(a), and the three receipts above are what an estimate is worth before the year closes.
- A split of the option income into a sixty-percent long-term and forty-percent short-term slice under section 1256. Seven of the eight audited periods above report no capital gain distribution at all, and no fund in the set has designated one.
- A qualified-dividend fraction. Both YieldMax funds report qualified dividend income of none for both years, and the prospectus says a holder should not expect any.
- A forward yield. The headline rate annualises one payment against one NAV; the 30-day SEC yield is what the fund earned net of fees over a month. Both are printed with their dates and neither is a forecast.
- What a substitute payment does to basis when shares are lent from a margin account. Verified as an absence in Publication 550 and the regulation, not a search miss.
- State tax, the alternative minimum tax, and anything about a 401(k). The Department of Labor rule on crypto in 401(k) plans was not final as of August 2026. Nothing on this page assumes it.
How the math works
A year of distributions is the latest declared payment per share, times the payments a year the declared frequency implies, times the shares. The issuers' own headline rate is built the same way: NEOS multiplies the most recent distribution by twelve and divides by the ex-date NAV.[1]
The return-of-capital range splits that year into an ordinary slice and a return-of-capital slice at each end of the range. A dividend is a distribution out of earnings and profits computed as of the close of the taxable year, section 316(a), which is why the split is not known until the year ends.[17]
The federal tax on the ordinary slice is that slice times the one marginal rate typed above. No bracket is applied, no deduction is taken, and no state tax is modelled.
The net investment income tax, when ticked, adds 3.8 percent of the ordinary slice, section 1411(a)(1).[14]The statute applies it to the lesser of net investment income and the excess of modified adjusted gross income over a threshold: $250,000 married filing jointly, $125,000 married filing separately, $200,000 single or head of household. The IRS states those amounts are not indexed for inflation. The thresholds are printed here and not tested by the calculator.[15]
Return of capital follows the three tiers of section 301(c): the dividend part is income; the part that is not a dividend reduces the adjusted basis of the stock; the part beyond basis is gain from the sale or exchange of property.[16]Publication 550 works the cycle: stock bought for $100, a nondividend distribution of $80 takes basis to $20, a later $30 takes basis to zero and the other $10 is a long-term capital gain.[18]
Basis after one year is the cost basis per share less the return-of-capital slice per share. Years to zero basis is the cost basis per share divided by that per-share slice, holding the payment and the range constant; a range that includes zero return of capital prints never at that end. Return of capital past zero basis is the per-share excess times the shares held, and it is zero whenever the basis outlasts the year.
Inside a traditional IRA the distributions are not taxed when paid, and distributions that are included in income are taxed as ordinary income on withdrawal; capital gain treatment is not available, so the fund's character never reaches the return. Inside a Roth a qualified distribution is not taxed; the 5-year period runs from the first Roth contribution and a separate 5-year period from each conversion, with the 10% additional tax on an early distribution and a $10,000 lifetime allowance for a first home.[19]
Nondividend distributions reach the holder in Form 1099-DIV box 3, which the filer enters if determinable.[20]Payee statements are due by January 31 for most returns.[21] Nothing above is final. The character of 2026 distributions arrives on Form 1099-DIV, box 3, due to holders by January 31, 2027; until then every return-of-capital figure is an estimate the issuer may revise.
Shares held in a margin account can be lent out. A substitute payment that arrives instead of the distribution is reported as other income on Form 1099-MISC, not as a dividend, and the IRS names a return-of-capital distribution among the payments a substitute can stand in for (Publication 550). What a substitute payment does to basis is not stated in any fetched document and is not modelled here.[18]
Sources
- [[1]] NEOS Bitcoin High Income ETF (BTCI) fund page: distribution history, distribution rate, 30-day SEC yield, fees, pricinghttps://neosfunds.com/btci/accessed 2026-09-02
- [[2]] YieldMax MSTR Option Income Strategy ETF (MSTY) fund page: distribution table with estimated return of capital per payment, distribution rate, 30-day SEC yield, NAVhttps://yieldmaxetfs.com/our-etfs/msty/accessed 2026-09-02
- [[3]] YieldMax Bitcoin Option Income Strategy ETF (YBIT) fund page: distribution table, distribution rate, 30-day SEC yield, NAVhttps://yieldmaxetfs.com/our-etfs/ybit/accessed 2026-09-02
- [[4]] Roundhill Rule 19a-1 notice for the YBTC and YETH distributions payable September 3, 2026https://www.roundhillinvestments.com/assets/data/rh_filings/19a-notice-YBTC-YETH-9-2-26.pdfaccessed 2026-09-02
- [[5]] Roundhill Investments daily NAV file (YBTC row, rate date 09/01/2026)https://www.roundhillinvestments.com/assets/data/FilepointRoundhill.40RU.RU_DailyNAV.csvaccessed 2026-09-02
- [[6]] Roundhill Bitcoin Covered Call Strategy ETF (YBTC) fact sheet, as of 06/30/2026https://www.roundhillinvestments.com/assets/pdfs/YBTC_Fact_Sheet.pdfaccessed 2026-09-02
- [[7]] Roundhill Rule 19a-1 notice for the YBTC distribution payable July 31, 2024https://www.roundhillinvestments.com/assets/data/rh_filings/19a-notice-YBTC-07-30-24.pdfaccessed 2026-09-02
- [[8]] Roundhill ETF Trust Form N-CSR, annual report for the fiscal year ended December 31, 2025 (YBTC financial highlights and tax character of distributions, 2024 and 2025)https://www.sec.gov/Archives/edgar/data/1976517/000113322826003392/rnwar-efp22837_ncsr.htmaccessed 2026-09-02
- [[9]] YieldMax ETFs Form N-CSR, annual report for the fiscal year ended October 31, 2025 (MSTY and YBIT financial highlights and tax character of distributions, 2024 and 2025)https://www.sec.gov/Archives/edgar/data/1924868/000199937126000616/yieldmax_ncsr-103125.htmaccessed 2026-09-02
- [[10]] NEOS ETF Trust annual financial statements, fiscal year ended December 31, 2025 (BTCI consolidated financial highlights and Note 6, tax matters)https://neosfunds.com/wp-content/uploads/NEOS-Annual-Financial-Statements.pdfaccessed 2026-09-02
- [[11]] NEOS ETF Trust semi-annual financial statements, six months ended June 30, 2026, unaudited (BTCI consolidated financial highlights and Note 6, tax matters)https://neosfunds.com/wp-content/uploads/Semi-Annual-Financial-Statements-1.pdfaccessed 2026-09-02
- [[12]] NEOS Bitcoin High Income ETF (BTCI) Rule 19a-1 notice for the distribution payable July 25, 2025https://neosfunds.com/wp-content/uploads/BTCI-19a1-Notice-7.23.25-Confidential.pdfaccessed 2026-09-02
- [[13]] NEOS Bitcoin High Income ETF (BTCI) Form 8937, Report of Organizational Actions Affecting Basis of Securities, fiscal year ended December 31, 2025https://neosfunds.com/wp-content/uploads/NEOS-Bitcoin-High-Income-ETF-Form-8937-12.31.25.pdfaccessed 2026-09-02
- [[14]] 26 U.S.C. 1411, Imposition of tax (net investment income tax; Office of the Law Revision Counsel, current through August 31, 2026)https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section1411&num=0&edition=prelimaccessed 2026-09-02
- [[15]] IRS, Questions and Answers on the Net Investment Income Taxhttps://www.irs.gov/newsroom/net-investment-income-tax-faqsaccessed 2026-09-02
- [[16]] 26 U.S.C. 301, Distributions of property (Office of the Law Revision Counsel, current through August 31, 2026)https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section301&num=0&edition=prelimaccessed 2026-09-02
- [[17]] 26 U.S.C. 316, Dividend defined (Office of the Law Revision Counsel, current through August 31, 2026)https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section316&num=0&edition=prelimaccessed 2026-09-02
- [[18]] IRS Publication 550, Investment Income and Expenses: nondividend distributions, basis adjustment, Example 1; reporting substitute paymentshttps://www.irs.gov/publications/p550accessed 2026-09-02
- [[19]] IRS Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs): traditional IRA distributions taxed as ordinary income; Roth IRA qualified distributions and the 5-year periodhttps://www.irs.gov/publications/p590baccessed 2026-09-02
- [[20]] IRS Instructions for Form 1099-DIV, Dividends and Distributions: box 3, nondividend distributions, entered if determinablehttps://www.irs.gov/instructions/i1099divaccessed 2026-09-02
- [[21]] IRS General Instructions for Certain Information Returns: payee statements due January 31 for most returnshttps://www.irs.gov/instructions/i1099giaccessed 2026-09-02