I thought all earnings in my IRA were tax deferred. I received Schedule K-1 showing income. Do I have to report this income now?

Yes. IRAs are taxed on unrelated business income. This may be received if your IRA holds an interest in a master limited partnership (MLP). This income is reported to an IRA owner on Schedule K-1 and must be reported currently on the IRA owner’s tax return; such income is not deferrable. More specifically, unrelated business income over $1,000 triggers unrelated business income tax (UBIT) that is reportable. If you have further questions, contact your IRA custodian or trustee.