I have owned real estate in my self-directed ira for 8 years and have followed all the rules for only taking distributions via my self-directed ira administrator. This year for the first time the property manager's accountant has issued a 1099-misc for rental income sent to my ira which I have deposited in the IRA's bank account. I am concerned about being taxed twice - on the amount sent to my IRA and again on actual distributions through my administrator which generate a second 1099. Can I disregard the 1099-misc? If not, what should I do with it?
You do not enter the form 1099-MISC sent your self-directed IRA on your personal tax return.
Income in your self-directed IRA are tax-deferred. You should send that 1099-MISC to your self-directed IRA administrator who will keep it in the IRA's tax records.
You do not enter the form 1099-MISC sent your self-directed IRA on your personal tax return.
Income in your self-directed IRA are tax-deferred. You should send that 1099-MISC to your self-directed IRA administrator who will keep it in the IRA's tax records.
But the IRS checks to see if all 1099-MISC income is reported on tax returns. If the Self-Directed IRA uses my personal SSN, my personal return will be flagged. How can it be accounted for to avoid IRS challenge? And if challenged what would I need to do?
You have two options to account for the 1099-MISC that was reported in your Social Security number; however, I encourage you to take the first approach.
@mike44102 Please see edited answer.
[Edited 02/18/2024|2:24 pm PST]