Federal tax law does require that a Form K-1 be sent to every partner (or investor) who held a partnership interest during the applicable tax year. If an investor has a partnership interest that is held in a retirement account (E.g. Traditional IRA, Roth, 401(k), etc.), the amounts reported on the Form K-1 are not reported on the investor’s personal tax return.
However, investments within a retirement account do require additional considerations and may have tax consequences. Current tax law requires IRAs and certain other tax-exempt entities with more than $1,000 of gross qualified Unrelated Business Taxable Income (“UBTI”) to file a tax return using Form 990-T. The account will typically only owe taxes if its UBTI is greater than $1,000. You should discuss this issue with your tax advisor to ensure that all required tax filings and tax payments are complete and accurate.