Unrelated business income: Form 990-T

[Vgene]

Client received two 1065 k-1s for investments within LPs: one for his roth-IRA and one for his SEP-IRA. Each k-1 shows it having gross income for unrelated busiess activity. The K-1s each show the investment broker on the k-1s as the partner as follows: Piper Jaffray as Cust FBO "client's name". The investment broker's Federal ID # is also listed as the Partner's ID #. However, the address used is the client's!
WHO IS REQUIRED TO FILE THE 990-T? The instructions for the form 990-T states that "Fiduciaries for the following trusts that have $1000 or more of related trade or business gross income mus file Form 990-T".... then the trusts are listed including SEPs & Roths. Is Piper Jaffray considered the fiduciary and thus responsible to file the 990-T or is the client the responsible party here. If Piper Jaffray is to file the 990-T, why is the k-1 even being sent to the client?
And if the Client is to file a 990-T, under what ID# should it be filed? Since the k-1 came in Piper Jaffray's ID#, that is the number the IRS will be looking for to match it up. So why was it mailed to the client's address and not directly to Piper Jaffray. Should have there been a new ID# applied for for these activities by Piper Jaffray and it be used to file the 990-T on?

WOW - I hope someone out there has had experience in this area and can help out. THANKS in advance.

[Bees Knees]

A qualified retirement plan is a tax-exempt trust [IRC §401(a)]. That means it is an entity that is exempt from tax, just like your local charitable organization. Form 990-T instructions, page 2 says the fiduciary of a trust that is an IRA, SEP, SIMPLE, etc. must file if there is $1,000 or more of unrelated trade or busines gross income.

You, the beneficiary of the IRA/SEP/SIMPLE, etc. are not required to file anything. The tax has already been subtracted from your account balance.

[Vgene]

So Why The K-1 At All?

Thanks for the response. So why is a k-1 sent to the owner of the retirement plan if he is not to do anything with it? Does this mean that Piper Jaffray has filed the 990-T?

[Bees Knees]

The K-1 is filed because the IRA/SEP/SIMPLE, etc. is a partner in a partnership. The partnership is the business. The IRA is simply a partner of the business. The partnership might also have non-IRA partners. A K-1 is issued to all partners, whether the partners are individuals, corporations, or IRAs. Since this particular partner is an IRA, exempt from tax, the partner files a 990-T to pay tax on the unrelated business income. The trustee sends a copy of the K-1 to the IRA beneficiary so that the beneficiary can see what the IRA earned as a partner and what it may or may not have to pay tax on. The trustee is the one who files the 990-T, not the beneficiary. Does this mean Piper Jaffray has filed the 990-T? I don't know. Call them and ask.