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MequonCPA
MequonCPA, Certified Public Accountant (CPA)
Category: Tax
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Experience:  CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.
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I have Stock investments in publicy traded limited partnerships

Resolved Question:

I have Stock investments in publicy traded limited partnerships and have received K-1 forms. The tax treatment appears very complex. One is held in an investment account Ann three (3) others all all in traditional IRA accounts.

Do the IRA 3have to be reported? How do I report taxes on the investment account?

Gin
Submitted: 3 years ago.
Category: Tax
Expert:  MequonCPA replied 3 years ago.

Hi and welcome to JustAnswer:

 

You are required to report the information received on investement account K-1 on your personal return.

 

The other K-1s are part of your IRA. In most cases, these K-1s are exempt from taxation. However, if your Unrelated Business Taxable Income (UBTI) is $1,000 or more, your IRA will be required to file a Form 990-T. If there is UBTI, the K-1's should have a Code "V" in Box 20 of the K-1.

 

I have provided a link to IRS Publication 598 that explains UBTI and who is taxable.

 

http://www.irs.gov/pub/irs-pdf/p598.pdf

 

 

Customer: replied 3 years ago.
I know I have to report the investment K-1 but I was hoping for info as to how with more data.
This K-1 nets to a loss of less than a $ 1,000" this would be a passive loss allowed only to the extent
Of a gain and there are none. Please expound as much as possible!
Expert:  MequonCPA replied 3 years ago.

You must report each line of the K-1 on the specific form listed on page 2 of the K-1. I have provided a link below to the Schedule K-1 and the information for preparation of your individual return on page 2. This input may include Schedule E with details for passive losses on Form 8582. Based on the limited information available, your analysis sounds correct. Your losses will flow to Form 8582. They may be suspended until the investment begins to turn a profit or you dispose of the investment.

 

http://www.irs.gov/pub/irs-pdf/f1065sk1.pdf

 



Edited by Steven Meyerson, CPA on 1/3/2011 at 12:32 PM EST
Customer: replied 3 years ago.

Steve,

This K-1 C. has provided a graphic guide (flowchart) with the following as their first note: "if the sum of K-1 boxes 1,2,3,4,8,9a,10,11,12 and 13J result in a negative number (a passive activity loss) DO NOT REPORT any of the amounts from boxes

1,2,3,4,8,9a,9b,9c,10,11,12,13J,15 and 17 on your federal tax return unless you sold

all shares in the curren tax year." These boxes do add to a negative on my K-1.

 

This appears to leave interest 5 , ord div 6a, qual div 6b, and some form 4952 items to report:13H and 20A..............any comments?

 

Thanks

Expert:  MequonCPA replied 3 years ago.

Hi -

 

That's the first time I've heard that. Usually I transfer the amounts to the proper forms and end up with a passive loss carryover. My question is this, will the K-1 provider keep a schedule of your suspended losses or will you need to maintain a side schedule.

 

The interest and dividends must be reported as they are not passive income. The investment interest carries to form 4952 and may be limited based on your investment income.

MequonCPA, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 2324
Experience: CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.
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