Posted by Bud Branstetter on April 15, 2003 at 03:07:34:
If you email me direct I may be able to help you with an answer to your question.
Roth IRA Unrelated Business Income Tax - Posted by Uncle Sam
Posted by Uncle Sam on April 08, 2003 at 11:18:14:
It’s my intention to purchase a property using my Roth IRA.
The property I plan on buying will have a first mortgage and my Roth will be buying the property
subject to the first.
I plan on having my Seller deed their property into a land trust, then assign the Beneficial interest to
my Roth.
I’m a bit unclear of the tax ramifications of this and I can’t seem to get a straight answer either from
my accountant, Mid Ohio (Now Equity Trust Corp), or the IRS.
I’ve heard that the sale of the property will be subjected to UBIT (Unrelated Business Income
Tax)because the Roth IRA is acquiring a property with existing debt.
It’s my thinking that if the property is placed into a land trust, of which my Roth IRA only owns the
beneficial interest in, then perhaps the UBIT doesn’t apply since the trust is the owner of the
property and acquired the debt, not the IRA.
Does UBIT apply or not?
Any of you pro’s who use Roth IRA’s have the answer to this?
TIA
Uncle Sam