Actually you do, or rather the custodian of the IRA does, in some cases.
If you hold a Limited Partnership or LLC in your IRA then any Unrelated Business Income in excess of $1,000 is taxable (even though it is in an IRA). It is not reported on your tax return but on a 990-T form. (The custodian of your IRA is required to file the form for you but you must submit the K-1 form(s) to them - ask the custodian about this).
Unrelated Business Income is reported as code "V" in box 20 on the K-1 form.
Also see pub 598.
<a rel="nofollow" target="_blank" href="
http://www.irs.gov/publications/p598/ch01.html">http://www.irs.gov/publications/p598/ch01.html</a>
Most custodians will send a letter to IRA holders that have such investments informing then what to do of they receive such a K-1 (I know Schwab does since I receive the letter every year).
Unless there is more than $1,000 of unrelated business income total from all such K-1's, you can ignore it/them).
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
