990-T if moving in-kind from IRA to Indiv?
Will a direct transfer in-kind from an IRA to an Individual account trigger a 990-T on unrealized gains, or for other reasons? A specific position of concern is Enterprise Products Partners LP (EPD). In some cases, a client may opt for an in-kind distribution and journal shares to their non-qualified account to satisfy an RMD. Since the position isn’t actually being sold, what are the ramifications, if any, to be aware of as it relates to 990-T reporting? Thank you.
Permalink Submitted by Alan - IRA critic on Thu, 2022-09-29 20:22
A distribution from the IRA will not trigger UBTI after the distribution or because of it. However, UBTI that occurred while the IRA held the investment may still be enough to require a 990 T for the period that the IRA held the investment. In other words, the longer the investment remains in the IRA, the higher the amount of UBTI there will be, and if 1000 or more, a 990 T must be filed for the IRA and tax paid from the IRA directly subject to the high trust tax rate.