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New Member

Form 990-T

Late October 2019 I received notification from Fidelity that form 990-T for tax year 2018 was filed on my behalf. 

Net/Net of this filing was a capital gain/business taxable income of $65K with a tax paid/deducted and sent to the IRS for a total of $12K (including a penalty and interest of).


The transaction was related to a Master Limited Partnership I held in my IRA for three years and closed out in early 2018.  I need some clarification on what to do next, if anything.


Do I need to amend my 2018 return to reflect this federal tax payment?  Do I need to address this transaction on my upcoming 2019 return?  There is a statement that says:

"This filing and excise tax payment does not impact your individual tax return"




4 Replies
Level 15

Form 990-T

"This filing and excise tax payment does not impact your individual tax return"


The notice told you what to do ... NOTHING ... it has nothing to do with your form 1040.   This was a return done for the IRA due to the kind of investments  you had in the account.  

Not applicable

Form 990-T

partnerships included master limited partnerships can generate business income.  Congress decided that profit making businesses inside a tax exempt entities such as an IRA, 401K, etc,   should not escape taxation.   therefore they wrote a code section  that computes what is referred to as unrelated business taxable  income (UBTI) and imposed a tax on this if more than $1,000    tax exempt entiities like your IRA are supposed to file annual tax returns to report and pay tax on this UBTI.   This is done by the entity filing 990-T


as to whether you have a claim against Fidelity for late filing of the return or for whatever reason penalties and interest were imposed, seek legal counsel?   did you get the 1065 k-1 and fail to forward it to Fidelity? 


if you have any other MLP's in your retirement account, there could be future 990-Ts, that may need to be filed.


UBTI is reported in box 20 of K-1 


as stated none of this gets reported on your 1040. 

New Member

Form 990-T

Received the same thing mentioned above. Fidelity is paying the tax plus late fees and interest from my IRA. So I will be taxed on the payment withdrawl as well as the funds I just paid tax on when withdrawn. Is this a first step in going after our IRAs by congress?

Level 15

Form 990-T

LOL  ... this rule has been in place for many years.  A 990 is required to be filed if needed per the 990 instructions.  Sadly if you choose to pay the taxes/interest/penalties with IRA funds then that amount that is considered a distribution which is taxable on your tax return.    Reconsider the type of investments held in the IRA in the future to avoid this situation. 

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