K-1 needed for IRA Account Holder?
In 2014 a number of our clients held a certain investment, in both IRA and non-IRA accounts, that will generate a K-1. Although the activity that is generating the K-1 will not impact the tax liability for assets held in an IRA account, is the IRA client still required to submit the K-1 to the IRS along with their tax return? Or is it not necessary since their tax liability is not impacted?
Thank you.
Permalink Submitted by Alan - IRA critic on Thu, 2015-02-05 18:21
For the IRA, tax liability will be impacted if UBTI exceeds 1,000. In that case, the IRA (not the taxpayer) must file a 990T return and tax due at the higher trust rates must be directly paid from the IRA account. The IRA owner should check for UBTI box (20V) to determine any tax filing requirement. Many larger IRA custodians will file the 990T. The personal 1040 is not affected by the 990-T filing requirement.