LLC solo 401k form 1099INT and schedule K-1

[amyonghwee]

I have a SMLLC and I set up a solo 401K under this LLC. I made investments using this solo 401K funds. I received Form 1099INT  and Schedule K-1. 

For 1099INT, these should be tax-exempt interest since they are from solo 401K funds.

Should I still enter these amounts under "Tax-exempt interest" ????

How should I handle Schedule K-1 ?

[Mike9241 · Accepted solution]

Is it the 401k's EIN or your LLCs EIN or your SSN that is on the 1099 and K-1? It should be the 401k's. in which case neither goes on your 1040.  Look at 20V on the k-1 - unrelated business taxable income (UBIT) - if over $1,000 the trustee of your 401k must file form 990-T and pay the UBIT tax from the account 

[amyonghwee]

Just to clarify, this LLC is taxed as a C-corp and so it files Form 1120, and not Form 1040.

The 1099INT and schedule K-1 listed the LLC's EIN.  Under partner's name, it lists IRA Club xxxx Solo 401K yyyy, as IRA Club is the custodian of my solo 401K.

Thanks @tagteam @Mike9241 .

[Mike9241]

no 1099-Int should have been issued since the interest was earned by the tax-exempt retirement account.  as for the k-1 I2 in part II should be checked since the partnership was owned by the retirement account. checking this box tells the IRS the real owner was your retirement account. there is no such box on a 1099-INT 

you should contact the custodian to issue a corrected 1099-INT.

if I2 isn't checked a corrected k-1 needs to be issued. 

[amyonghwee]

 Yes, schedule k-1   I2 in part II is  checked.  Do I need to enter this into Turbotax Business under schedule K-1 received ??

[Mike9241]

No it's not the C-corp's income/loss. 

[amyonghwee]

Meaning I do not need to enter this schedule K-1 into Form 1120?