ND Partnership Return - Schedule KP - IRA partners REQUIRED to be reported type Exempt

[jbovard]

Problem: the IRS allows partner types on Schedule K-1 to be listed as "IRA".  However, North Dakota will reject any e-filed partnership return that includes IRA as a partner type.  They simply do not allow that type of partner listed on Schedule K-1.  However, I called the ND tax department and they do legally allow IRA's a partners in a partnership (they have to since the IRS allows it), but the ND tax technician said that that the IRA partners required be marked as "Exempt" on the ND Schedule KP Column 3.  This is because IRA's are exempt from ND income tax and allows the return to be properly processed for e-file purposes.

The instructions for ND Form 58, page 10 state that the only acceptable reporting types are:

Individual.........................I
C corporation.................CND Partnership
S corporation..................S
Partnership......................P
Estate...............................E
Trust.................................T
Exempt organization.... O

Solution: Please add a field on Screen 7 under the North Dakota section to allow IRA partners to be marked as type Exempt.  Or better yet - change the program so that if type for Federal purposes is marked IRA, that the program AUTOMATICALLY reports the partner type on ND Schedule KP column e as Type O Exempt Organization.   

Thank you for your help.

[Anonymous]

Thanks for the idea to Add Type O Exempt Organization on Screen 7 under the North Dakota section to allow IRA partners to be marked as type Exempt . We are changing the status to "Open for voting" since it is no longer considered "New".

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