How does the K-1 for work for reporting?

Forum|Forum|7 years ago
June 6, 2019
1 reply
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I purchased stock from ETP (small amount) on ETrade and received $24 in dividends. I reported this as 1099-DIV. However, after following up on this, it appears that I need to obtain the K-1 form for reporting. Now what? Do I need to file an amendment to my tax return. What is different about the K-1 than the 1099-DIV? Secondly, can I move this stock to my ROTH IRA, if so, then do I not have to worry about taxes on this stock in the future?

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Best answer by TomYoung

"What is different about the K-1 than the 1099-DIV?"

You are now a partner in a partnership, you're not an owner of "shares" of a corporation. Partnerships do not pay income taxes. Instead they "pass through" to their partners all of their economic activity, reported on Schedule K-1 and the partners then enter this economic activity in their own personal income tax returns. Accordingly, partnerships don't pay "dividends" they make "distributions" and most commonly these distributions are treated by the partners as a reduction in the basis in the partnership.

So I'd say an amendment is in order.

You'll have to sell and re-buy if you want to hold this ETF in your Roth. You can't do in-kind contributions.

Tom Young