topic 990-T Carryover Losses in SEP IRA in Retirement tax questions

990-T Carryover Losses in SEP IRA

Blacksmoke — Tue, 24 Feb 2026 06:50:21 GMT

My 990-T filing for my SEP IRA the past few years has shown UBTI earnings (from the K-1) for one of my stocks (an LLP) and created quite a taxable amount. Can you use carryover losses from other stocks with K-1's in the SEP IRA to offset these gains or is each stock treated separately and gains/losses have to stay just with that stock ?

Re: 990-T Carryover Losses in SEP IRA

dmertz — Sun, 30 Jul 2023 00:59:01 GMT

These are partnerships, not stocks. Nothing on the Schedules K-1 affects your IRA other then the UBIT which must be paid with funds from the IRA, reducing the value of the IRA. (Of course any non-UBTI income or distributions paid to your IRA from the partnerships increases the cash balance in your IRA, but these are not reportable by your IRA. IRAs are tax-exempt trusts that only report and pay tax on UBTI.)

Re: 990-T Carryover Losses in SEP IRA

Blacksmoke — Sun, 30 Jul 2023 05:08:26 GMT

Thanks for the correction on stock/partnership wording - my brain must have been asleep. Do you have any knowledge in regards to the main question in the post about using carryover losses (UBIT) from other partnerships in the SEP IRA to offset gains in a different partnership ? I have one partnership with UBIT gains and several others with UBIT losses the past 6 years.

Re: 990-T Carryover Losses in SEP IRA

dmertz — Sun, 30 Jul 2023 11:31:46 GMT

Nothing outside of what is reported in box 20 of a Schedule K-1 (Form 1065) has any effect on UBTI. UBTI is the amount reported with code V in box 20.

As far as I can tell, a partnership cannot report an amount less than zero for UBTI. Section 512(a)(6) says that UBTI for each separate business is to be calculated separately and the UBTI of each separate business shall not be less than zero. https://www.law.cornell.edu/uscode/text/26/512

Do you have Schedules K-1 (Form 1065) reporting negative amounts with code V in box 20?

Re: 990-T Carryover Losses in SEP IRA

Blacksmoke — Sun, 30 Jul 2023 16:17:27 GMT

Yes- I have several K-1 s with negative amounts in box 20 -see attached photo.

Re: 990-T Carryover Losses in SEP IRA

dmertz — Sun, 30 Jul 2023 22:04:53 GMT

Given the section of the tax code that I mentioned that doesn't seem proper, but maybe I'm misinterpreting something.