UBTI and a 990T

[KTB]

Client has UBTI of a negative (loss) amount within his self directed brokerage account within the 401(k). He wants to claim that for potential tax deductions on the loss in future years so we are needing to complete a 990T.

I am not a tax accountant so this form is way over my head. Anyone ever had to complete one and know what sections to complete? I have been reading over the instructions from the IRS form and am still lost!

[My 2 cents]

I don't work directly on 401(k) plans, but it would surprise me greatly if any pre-withdrawal investment results would be taken into account for any tax purposes. Certainly, no such thing as deducting investment losses arising under a 401(k)! Put in $10,000 and it's only worth $8,000, since there were no taxes paid on the $10,000, you don't get to deduct the $2,000 "loss" upon withdrawal.