Sch K-1 (Form 1065) Part II, I1 and I2, identify entity as IRA/Sep/Keogh. You do not question this and it does not appear on the TurboTax Worksheet. Is this important?

I hold this publicly traded partnership, PowerShares DB US Dollar Index Bearish Fund, in my rollover IRA account.  Yet I am being presently taxed on Other Income (Part III, 11C).  Perhaps this is required for K-1 items in an IRA.  TurboTax does not give me a question that allows me to show that my entity is an IRA.  And it does not appear in the type of entity block on the Turbo Tax worksheet.  This causes me to wonder, did Turbo Tax neglect to ask for information on the K-1 that it needs to know to correctly determine my tax consequences.

Answer

1 person found this helpful

If the amount in box 20 with code "V" is more than $1,000, then it must be reported - but not by you on your tax return, but by the IRA custodian on a 990-T form.  (Most IRA custodians send a letter to IRA owners that hold such an investment notifying them of this).

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

Was this answer helpful? Yes No
Default user avatars original d5efadcf497ea7b3d86c6f8d148d66633a29ce78fa8391af628adf32d9989354
SuperUser

No answers have been posted

More Actions

People come to TurboTax AnswerXchange for help and answers—we want to let them know that we're here to listen and share our knowledge. We do that with the style and format of our responses. Here are five guidelines:

  1. Keep it conversational. When answering questions, write like you speak. Imagine you're explaining something to a trusted friend, using simple, everyday language. Avoid jargon and technical terms when possible. When no other word will do, explain technical terms in plain English.
  2. Be clear and state the answer right up front. Ask yourself what specific information the person really needs and then provide it. Stick to the topic and avoid unnecessary details. Break information down into a numbered or bulleted list and highlight the most important details in bold.
  3. Be concise. Aim for no more than two short sentences in a paragraph, and try to keep paragraphs to two lines. A wall of text can look intimidating and many won't read it, so break it up. It's okay to link to other resources for more details, but avoid giving answers that contain little more than a link.
  4. Be a good listener. When people post very general questions, take a second to try to understand what they're really looking for. Then, provide a response that guides them to the best possible outcome.
  5. Be encouraging and positive. Look for ways to eliminate uncertainty by anticipating people's concerns. Make it apparent that we really like helping them achieve positive outcomes.

Select a file to attach:

Do you still have a question?

Ask your question to the community. Most questions get a response in about a day.

Post your question to the community