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juba1234+
New Member

What is a Form 8868? Can it be associated with one of my IRA companies?

I received a Form 8868 approval but did not request a extension. Could it have been submitted by one of my IRA companies on my behalf? Thanks
2 Replies
rjs
Level 15
Level 15

What is a Form 8868? Can it be associated with one of my IRA companies?

Form 8868 is an extension for a tax-exempt organization.

 

macuser_22
Level 15

What is a Form 8868? Can it be associated with one of my IRA companies?


@juba1234+ wrote:
I received a Form 8868 approval but did not request a extension. Could it have been submitted by one of my IRA companies on my behalf? Thanks

Yes, that is possible.  If you received a K-1 with code V in box 20 then then the IRA custodian (not you) must file a 990-T form.    The 8868 is an extension in time to file that form.  The IRA custodian may have requested it.  Ask them.

 

Unrelated business income is reported on a 990-T form.

 

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.


http://www.irs.gov/publications/p598/ch01.html

Per the 990-T Instructions: https://www.irs.gov/pub/irs-pdf/i990t.pdf

 

"Who Must File
Trustees for the following trusts that
have $1,000 or more of unrelated trade or
business gross income:
1. Individual retirement accounts
(IRAs), including traditional IRAs"
4. Roth IRAs described under section
408A,

 

The 8868 says:

Choosing the Applicable Return Code on Form 8868 for Trusts Filing
Form 990-T

Trusts required to file Form 990-T by the 15th day of the 4th month (April 15 for calendar year
taxpayers) (including Employee plans, IRAs, SEPs, SIMPLEs, Coverdell ESA, and Archer
MSA) should enter Return Code 05. Trusts required to file Form 990-T by the 15th day of the
5th month (May 15 for calendar year taxpayers) should enter Return Code 06

**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.**
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