IRA and K-1

[ljwalters]

Client just called she got a sch K-1 for partnership income this was purchased by her broker inside her K-1.
She doesn't report this does she? I do not know what to do with it.
She already filed so if it needs to go on the return it means an amendment, and that’s next week.

Linda

[Lion]

Have her give it to her IRA's trustee. If there's unrelated business income, the IRA may need to file Form 990-T; and some IRAs foist that chore back on the taxpayer.

As long as the K-1 is inside her IRA, it will not be reported on Form 1040.

[ljwalters]

Thanks Lion. I told her already to talk to her ira holder and she hasn't called me back, so just maybe he is doing the right thing and taking care of it.

[Lion]

Probably nothing to report by the IRA. K-1 should've gone to the IRA. But, I'm seeing more and more of them mailed to the address of the FBO (your client) and not to the IRA custodian. Maybe they're mailing them to everybody to cover their own butts. And, don't even get me started on whether it's a good idea for an IRA or anyone to own some of these PTPs!