Posted by John K Haslach, CPA, MST on June 20, 2005 at 15:49:36:
Thanks, John. Not trying to hit every topic on UBIT, it is just I rarely see it mentioned when SDIRAs are discussed, and it could be a very serious issue.
If someone is doing buy/fix/flip and are considered a dealer, they would be subject to UBTI.
And, even if treated as short/long term capital gain, some of the gain could be subject to UBTI if it is debt financed.
Invest real estate w IRA & Unrltd Bus Tax Inc - Posted by John K. Haslach, CPA, MST
Posted by John K. Haslach, CPA, MST on June 19, 2005 at 08:47:25:
Investing in real estate using your IRA can subject the IRA to Unrelated Business Tax, regardless of the type of IRA.
I rarely see it discussed, but the taxes, penalties and interest can be severe for noncompliance.
SDIRA & UBIT - Posted by John Merchant
Posted by John Merchant on June 19, 2005 at 15:23:37:
While I do agree anybody looking into using his IRA in REI should learn about UBIT, it’s not an omni-present factor in all REI deals.
In the usual buy/fix/flip there’s no UBIT at all, and only in those deals where the SDIRA buys and then rents and has “unrelated bus. income” does the UBIT come into play.
Re: SDIRA & UBIT - Posted by Bob
Posted by Bob on July 05, 2005 at 02:20:44:
I thought buy/fix/flip was unrelated business income, while rents are not (unless debt financed).