Probably not; however, if your IRA earns more than $1,000 in unrelated business income as
reported on the K-1s you received, the IRA must pay unrelated business
income tax -- UBIT -- on the amount above the $1,000 cutoff. Not all of
the distributions you receive from MLP investments will be UBI, and many
partnership investments will report little or no UBI on the K-1s they
send out. If the K-1s you received total to less than $1,000 in UBI,
there is nothing you need to do. With more than $1,000 in UBI you need
to contact your IRA custodian.
Tax rules require tax-advantaged accounts like IRAs to pay income tax on
what is called "unrelated business income." An IRA holds investments
and partnership income may not be investment income, resulting in UBI
from your partnership investments. The amount of unrelated business
income from your IRA's partnership investments will be listed as such in
Box 20 of the K-1 form. Only the amounts of unrelated business income
are important concerning taxes and your IRA account.
Not all of
the distributions you receive from MLP investments will be UBI, and many
partnership investments will report little or no UBI on the K-1s they
send out. If the K-1s you received total to less than $1,000 in UBI,
there is nothing you need to do. With more than $1,000 in UBI you need
to contact your IRA custodian.
For more information see http://finance.zacks.com/report-k1-ira-account-7692.html
