If your stock is a Limited Partnership and it is in your IRA can you disregard the K-1's that the companies send at tax time?

You cannot disregard them; they tell you how your stock is performing.

However, the income or the loss on the K-1 is NOT reported anywhere on your tax return. Hopefully, the fact that the stock is held under your IRA is clearly stated on the Schedule K-1, lest the IRS expect the income to be reported.

There is a lot of confusing information that is required on a Taxable K-1 on the Tax Return but not the gain or loss per say, is that correct? I think the IRS makes the
Company jump through a lot of hoops on the K-1 just for meanness.

Perhaps gain is the wrong word. The proper word is profit or income.

It is not confusing to the tax professional who prepares the Schedule K-1. If you data enter the K-1 onto your tax software, 90% of the time the software puts the information in the correct place.

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Originally Posted by AtlantaTaxExpert

Perhaps gain is the wrong word. The proper word is profit or income.

It is not confusing to the tax professional who prepares the Schedule K-1. If you data enter the K-1 onto your tax software, 90% of the time the software puts the information in the correct place.

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I stand corrected.

Thanks ATE I was doing my taxes with a so called expert and they screwed it up so I got a penalty and the preparer tried to blame me for not giving them the information but all they had to do was look on the second page and it was there. Have been doing them for the last 2 years. Have been using Turbo Tax, will have to see if their program will enter the Schedule K-1 data. I have about 7 LLC's in my
IRA for the first time and 1 in a taxable account.

Glad to help!

Just an FYI regarding K-1'a and TurboTax - it can be a bit daunting. Sometimes you have to enter a single K-1 as two separate K-1's into the program, if income comes from two different types of businesses. And sometimes I have found that the program wants a greater level of detail than is included either on the K-1 or the accompanying notes. But it seems to me that for the partnerships in your IRA you wouldn't have to enter anything, assuming that the limited partner is properly identified as the IRA trustee, not you directly. Of course while you don't report income from the partnership. you also can't take advantage of any losses or other write-offs like you can in a taxable account.

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Originally Posted by ebaines

Just an FYI regarding K-1'a and TurboTax - it can be a bit daunting. Sometimes you have to enter a single K-1 as two separate K-1's into the program, if income comes from two different types of businesses. And sometimes I have found that he program wants a greater level of detail than is included either on the K-1 or the accompanying notes. But it seems to me that for the partnerships in your IRA you wouldn't have to enter anything, assuming that the limited partner is properly identified as the IRA trustee, not you directly. Of course while you don't report income from the partnership. you also can't take advantage of any losses or other write-offs like you can in a taxable account.

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Thanks for the added input. I stand by what I said about the IRS trying to make the LLP's job of reporting very lengthy and cumbersome . Hate those damn things and they usually arrive later in the year and sometimes an amended one comes even later.