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Level 1

Solved

K-1 received

Forum|Forum|5 years ago
March 2, 2021
1 reply
5 views

I filed last week. Now I just received a K-1 from something that's part of my IRA. The amounts are quite small (>$200) and none of this came to me as income. What do I do with this at this point?

Best answer by DavidD66

If the K-1 is from an investment held in your IRA, you can probably just ignore it. If the investment is a Master Limited Partnership (MLP) you should be aware of a potential issue with holding MLPs in a IRA.

MLPs and other pass-through entities can trigger special issues in an IRA. Owning such a pass-through entity in a retirement account creates what's known as unrelated business taxable income, or UBTI. The Schedule K-1 you get from the MLP will include any UBTI figure. If the total exceeds $1,000 from all your MLP investments in your IRA, then you must complete a Form 990-T, and send to your IRA custodian for filing. You will then have to pay tax on the UBTI, even though you own the investment in a retirement account.

But if there is no UBTI, or the amount is less than $1,000, you can just ignore it.

Level 15

If the K-1 is from an investment held in your IRA, you can probably just ignore it. If the investment is a Master Limited Partnership (MLP) you should be aware of a potential issue with holding MLPs in a IRA.

MLPs and other pass-through entities can trigger special issues in an IRA. Owning such a pass-through entity in a retirement account creates what's known as unrelated business taxable income, or UBTI. The Schedule K-1 you get from the MLP will include any UBTI figure. If the total exceeds $1,000 from all your MLP investments in your IRA, then you must complete a Form 990-T, and send to your IRA custodian for filing. You will then have to pay tax on the UBTI, even though you own the investment in a retirement account.

But if there is no UBTI, or the amount is less than $1,000, you can just ignore it.

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