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

[Fenway-cpa]

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!

[abctax55 · Accepted solution]

Nope...

[TaxMonkey]

What TIN is listed on on the K-1?

[Fenway-cpa]

It is the IRA Custodian's (Fidelity)

[TaxMonkey]

I think that is a pretty good reason not to put it on the individual return

[abctax55]

ya' think ??  :smiley:

[Fenway-cpa]

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.

[itonewbie]

No worries.  She's just pulling his leg.

[abctax55]

"....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)