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Should net rental real estate and interest income from a partnership K-1 for a nominee IRA go on the 1040?

Fenway-cpa
Level 1

New client that has had K-1 from a partnership with net rental income and interest income, but in Part II of K-1 the IRA Custodian name and ID# is listed with the client's name and address.  The type in box I1 is Nominee IRA.  It is my understanding that this is income to the IRA, thus not taxable to client and does not go on 1040, however prior accountant (large firm) has been putting it on Schedule E for years...The partnership is commercial property investment firm.  Is this accurate?  TIA!

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abctax55
Level 15

Nope...

(I wanna be a member of the pot stirring club too)

View solution in original post

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8 Replies 8
abctax55
Level 15

Nope...

(I wanna be a member of the pot stirring club too)

View solution in original post

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TaxMonkey
Level 8

What TIN is listed on on the K-1?

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Fenway-cpa
Level 1
It is the IRA Custodian's (Fidelity)
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TaxMonkey
Level 8
I think that is a pretty good reason not to put it on the individual return
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abctax55
Level 15
ya' think ??  :smiley::smiley:
(I wanna be a member of the pot stirring club too)
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Fenway-cpa
Level 1
I think the same, but as I said prior accountant is a large regional firm that had been putting on the 1040 for years...I just wanted to be sure I wasn't missing something.  No need for sarcastic comments to the other commentator.
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itonewbie
Level 15
No worries.  She's just pulling his leg.
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Still an AllStar
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abctax55
Level 15
"....No need for sarcastic comments to the other commentator."  And it's so, so much FUN to yank on the Monkey's leg.
@Fenway.cpa  - stick around.  We pick on each other constantly - with a lot of respect tho.

Sounds like you have some amended returns to do, and possibly one ASAP (2014's)
(I wanna be a member of the pot stirring club too)
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