Something New

[LawrenceGR]

I got something I haven't seen before yesterday, a Sch K 1 for an IRA. I have seen plenty K-1's before but never connected to an IRA. I haven't gone over it with a fine tooth comb yet but I thought I would put here to get some other input. The first I thought I had was if this is an IRA? it doesn't seem a though the partner's share should be taxed now. Just thought I would see if any of you have heard of this. Thanks

[winnie]

never seen K1 from IRA

[JohnH]

I see them occasionally

Usually it's some sort of real estate investment (shopping center, apartment building, etc) and the wording on the document will make it clear that the k1 is being issued to the plan "FBO" the client.

[Acownt4it]

I have had a couple of these in the past. Treated them as I would any IRA statement.

[thomtax]

Royalty trusts

I got one of these this year. I actually thought that it was a corp. when I purchased shares in it. It was purchased because of high dividends. It is actually a trust that operates oil and gas pipelines..

The brokerage company sent an information brochure. I had read, not to put these trusts into a tax deferred account because you loose the benefits of it being tax deferred. I never took the time to find out why, but

While I haven't read it in detail yet, I understand that if my K1s go over a certain dollar amount, I must forward them to the brokerage company. They are then required to pay a certain amount from my account to the US Treasury.

I will know more in a couple of weeks when I get time to study the information.

LT

[Y2KEA]

I have seen those also. Look at the FEIN of the recipient. It is probably the number of the entity/trustee & not the SSN of the account owner. In this case it does not go on the 1040.

[taxxcpa]

K-1 in IRA

In an IRA it is no different than dividends or interest--it is non-taxable income within the IRA and not taxed until withdrawals are made from the IRA.

I've received a lot of them in my own IRAs.

[Davc]

And when it goes belly up and the client is certain they have a loss, you get to explain to them that it doesn't matter. (Unless they have basis and all IRA accounts are 0.)