Here are the lines for Form 990-T and UBTI The IRS emphasizes attaching a brief explanatory statement about the current loss carryforward updating and what the prior years’ numbers were.
Numbers from one MLP are NOT applicable to another entity.
Check Box 408(e) in Section B at top left.
Box C: Input Dec.31st IRA value.
Org. name (your broker/IRA trustee).
Address listed by broker
City, etc. is broker’s (As you know, only the IRA trustee can submit a 990-T.)
Box D: Employer ID # from broker (this will not change) and is initially issued by the IRS
Box E: #900099
Box J: Determine from your broker just who signs off on the 990-T plus that person’s office phone #. (This may or may not be the same person who reviews the 990-Ts.
Part I, Line 5: UBTI gain or loss for the current tax year. Same # in Columns A & C.
Part I, Line 13: Same # as Line 5 in both columns.
Part II, Line 29: 0
Line 30: Same as Line 13
Line 31: Total loss carryovers from prior year(s). If you haven’t submitted 990-T losses from a prior year or years, check with your broker’s tax dept. about paying a penalty to do this. Ameritrade charges a token late fee, but I don’t know whether the IRS allows a few months of tardiness or a year or more, so this could be complicated.
Line 32: As directed
Line 33: 0 (assuming you’re in UBTI loss mode only, but $1,000 against gains)
Line 34: As directed
Zeros on Lines 36, 39,40e,41,42,43,45,47
Part V: Lines 1-3 as directed (I check the first two “No” and leave Line 3 blank)
Sched. A: Check “No”
quoted from Etrade's IRA account agreement:
"If the investments held in your IRA generate $1,000 or more of "Unrelated Business Taxable Income" within the meaning of Section 512(a) of the Internal Revenue Code ("UBTI"), your IRA may owe a tax under Section 511 of the Internal Revenue Code. You understand and agree that you will be solely responsible for obtaining all information necessary for determining whether your IRA is required to file a Form 990-T for each tax year and all information needed to properly complete and file a Form 990-T for such tax year. Furthermore, you agree to prepare or have prepared the required Form 990-T tax return, and any other documents that may be required, and to submit them to the Custodian for filing with the IRS, at least 5 business days prior to the date on which the return is due for such taxable year, including an appropriate payment directive authorizing the Custodian to pay the applicable UBTI from your IRA. The Custodian will then file the Form 990-T in accordance with your instructions. You agree to indemnify the Custodian from any claims that may arise relating to the Form 990-T.
You understand and acknowledge that the Custodian will assume that either (a) your IRA has not generated UBTI or (b) you have independently filed the Form 990-T if the Custodian is not provided the Form 990-T and payment directive within the time period specified in Section 8.06 for the applicable tax year. You agree that, if your IRA holds assets that generate UBTI, your IRA at all times will contain sufficient funds to pay any tax imposed on the UBTI as the time this tax obligations becomes due, and that, if necessary to satisfy such obligations, you will liquidate assets or contribute sufficient amounts to your IRA (even if your contribution constitutes an "excess contribution"). You further agree that, to the extent funds are not available, the Custodian is authorized to liquidate any investments in your IRA necessary to generate the funds n
I think the easiest solution is to do what I should have done a while ago. Putting xray on ignore. Some people are just simply beyond help and despite the facts are always correct and never ever wrong. The actual citation from the IRS instructions for Form 990T are pasted on the other post.
Form 990-T EXEMPT ORGANIZATION BUSINESS TAX FORM
OK just for sake of argument let's pretend that a form made for exempt organizations has anything to do with an individual, instead of for 501-c's and charitable trusts like it clearly says on the form-
here is the text from the form you asked me to read on ubti per wikipedia-
IRAs generally are subject to tax on income that is taxable to most U.S. tax-exempt entities under 26 U.S.C. §511. 26 U.S.C. §408 contains many of the rules governing the treatment of IRAs. §408(e)(1) states: "Any individual retirement account is exempt from taxation under this subtitle unless such account has ceased to be an individual retirement account by reason of paragraph (2) or (3). Notwithstanding the preceding sentence, any such account is subject to the taxes imposed by section 511(relating to imposition of tax on unrelated business income of charitable, etc. organizations)."
In addition, the IRS unequivocally confirms this in the first few paragraphs of Chapter 1 of the November 2007 revision of Publication 598 that IRAs are "subject to the tax on unrelated business income." END QUOTE
My simple question to you now is this- Are the distributions paid retail investors like me FROM ETP UNRELATED TO THEIR NORMAL BUSINESS ACTIVITY?
rlp - Since you deal with TD Ameritrade it is easiest to simply send them the K-1s and have them charge you a few dollars (remind them Schwab does it for free). Basically there is nothing for you to do except put in your broker info on Lines A-E. Line J - give them the contact person your have and their phone number. The only real numbers go on line 5 in Part I. If you want a couple years worth of losses - you do for 2011 and let them do for 2012. It took me about 5 minutes to bundle up my K-1s.
As an aside - I owned EPD in a regular account for two months before moving those units into a trust. I had $1200 worth of UBTI on 1100 units. If I had owned those units in an IRA, I would have owed taxes!
Form 990-T EXEMPT ORGANIZATION BUSINESS TAX FORM
You do realize that anybody with half a brain could take one look at that and understand it has nothing to do with a PRIVATE individual figuring out their personal tax returns-Right?
Apart from the other suggestions below, you can also read about it on the website of the naptp, National Association of Publicly Traded Partnerships. They lobby congress in the writing of tax laws pertaining to MLPs and they talk about UBTI and form 990 for MLPs in an IRA on their website.
I mentioned the Wikipedia article because it contains citations to the actual US Code provisions, as well as to an IRS Publication.
But, since you're too lazy to do your own research, here's what IRS Publication 598 (Tax on Unrelated Business Income of Exempt Organizations) states on page 2 regarding Organizations Subject to the Tax.
"In addition, the following are subject to the tax on unrelated business income ... Individual retirement arrangements (IRAs) including traditional IRAs, Roth IRAs, Coverdell IRAs, simplified employee pensions (SEP-IRAs), and savings incentive match plans for empoyees (SIMPLE IRAs)."
Read the Wikipedia article on UBIT (Unrelated Business Income Tax) and scroll down to the section UBIT in an IRA. It gives United States Code citations and an IRS publication number as justification that IRAs are subject to UBIT.