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Tax question - K-1 for IRA holding
Old 03-25-2015, 07:55 AM   #1
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Tax question - K-1 for IRA holding

I bought some SVXY (ProShares short VIX futures ETF) in my Rollover IRA. Yesterday I received a K-1 for this holding. It showed appreciation in the value of the shares but there was no Unrelated Business Income shown in Box 20. Can I just ignore this for my Federal income tax filing since it is held in a tax-deferred account?
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Old 03-25-2015, 08:19 AM   #2
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Just off-the-cuff I would think so since IRA income isn't taxed until it is withdrawn.
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Old 03-25-2015, 08:20 AM   #3
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With no UBI its sounds to me as though there is nothing to report.
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Old 03-25-2015, 09:20 AM   #4
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Ignore it completely regardless of what it says. It doesn't apply to an IRA.
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Old 03-25-2015, 12:12 PM   #5
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Not exactly. If Box 1 or 2 has an amount in it, and that amount in the aggregate for your IRA adding up all K-1s is greater than (I think) $600, then you have UBI and the IRA custodian must file an income tax return and pay tax on the UBI. So, for example, NEVER buy a MLP in your IRA, as they generate ordinary income.

The Proshares partnerships as far as I know have never thrown off any box 1 or 2 income, so they probably can be ignored. But I would look to see, being OCD.
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Old 03-25-2015, 01:10 PM   #6
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I have an MLP in my IRA and each year, the account custodian files the tax report for the MPL as they are required to do. All I prove them is the K-1 information from the MLP which I have sent to me.
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Old 03-25-2015, 01:47 PM   #7
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Here's some more info:

How to Report a K-1 on an IRA Account | Finance - Zacks

"IRA and UBIT
If your IRA earns more than $1,000 in unrelated business income as reported on the K-1s you received, the IRA must pay unrelated business income tax -- UBIT -- on the amount above the $1,000 cutoff. Not all of the distributions you receive from MLP investments will be UBI, and many partnership investments will report little or no UBI on the K-1s they send out. If the K-1s you received total to less than $1,000 in UBI, there is nothing you need to do. With more than $1,000 in UBI you need to contact your IRA custodian."
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Old 03-25-2015, 06:09 PM   #8
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Thanks to all for your input. On the K-1 that I received, Boxes 1 and 2 were blank in addition to Box 20. You have re-enforced my initial inclination to ignore the K-1 in filing my tax return.
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