topic Re: ubti in Retirement tax questions

ubti

skirch2 — Sun, 12 Jan 2025 15:25:32 GMT

The IRS issued me a 990T in my IRA then subtracted $20000 from my iRA I never received a K-1

Re: ubti

dmertz — Sun, 12 Jan 2025 16:23:35 GMT

The Form 990-T would have been prepared by the IRA custodian and filed with the IRS. The Form 990-T reports income to the IRA (Unrelated-Business Taxable Income) that is taxable to the IRA despite the IRA normally being a tax-exempt trust. The IRA custodian properly used funds in the IRA to pay the tax. This payment of tax is effectively an investment loss within the IRA, so it is not reportable anywhere on your tax return.

Perhaps the Schedule K-1 was sent to the IRA custodian since your IRA, not you, was the member of the partnership and it's the IRA that has the Form 990-T filing requirement.

Re: ubti

skirch2 — Sun, 12 Jan 2025 16:36:16 GMT

Exactly! The form was sent to IRS from my broker (Incorrectly) So the IRS issued the 990T on faulty information.

The broker will not sign an amended return for me. They don't know how to handle it. I went online and got the K-1 my CPA said it was filled out incorrectly by a large Acct. Co.

He contacted the accounting firm and they agreed.

Re: ubti

dmertz — Sun, 12 Jan 2025 18:22:39 GMT

If the Schedule K-1 is incorrect, the needed action would be to get the issuer to correct the Schedule K-1.

Re: ubti

skirch2 — Sun, 12 Jan 2025 19:11:15 GMT

The information on the K1 is correct. My tax liability reads $325.00 Yet the IRS charged my IRA account $19998.00

This is a mystery to my CPA.

Re: ubti

dmertz — Mon, 13 Jan 2025 03:50:47 GMT

UBIT is calculated on the amount of UBTI shown on the Schedule K-1 in box 20 with code V.

"My tax liability reads $325.00"

I don't understand what you mean by that. You have no personal tax liability for UBTI from an investment in your IRA. It's the IRA that is subject to UBIT.

Re: ubti

skirch2 — Mon, 13 Jan 2025 18:52:36 GMT

That’s where they seized my funds—my IRA. I have full ownership of my IRA.

Re: ubti

skirch2 — Wed, 15 Jan 2025 12:14:38 GMT

Thats partlty correct. Except the IRS took way too much instead of $325 they took $19998.

Now the question begs how to get the IRS to admit their mistake.