Do You Have Debt-Financed Real Estate in Your IRA? Equity Trust Can Help You File the 990-T

Did Your Partnership or LLC Generate UBIT? You Might Have to File a 990-T

If you own debt-financed real estate in your IRA (i.e. using a nonrecourse loan with your IRA to purchase a property), you may be subject to filing Form 990-T with the IRS. Debt-financed real estate held by your IRA account could be subject to Unrelated Business Taxable Income (UBTI) under the Internal Revenue Code sections 511-514 if the property is producing rental income and/or has been sold in the current tax year.

Also, if you receive a K-1 from your general partnership or LLC within your IRA and the form states in box 20 a code V or W you may be subject to filing form 990-T with the IRS. Partner liabilities as listed in section K and depending on the type of unrelated business could also trigger a portion of your ordinary business income to be subject to UBTI under the IRS Code Section 512.

Don’t know whether you should file Form 990-T? Unclear of what UBTI is?

Equity Trust can help. If you have debt-financed property or a partnership/LLC interest in your IRA or think you might have to file Form 990-T, Equity Trust will review your account and discuss your options. Depending upon your situation, Equity Trust can provide Form 990-T filing services at a nominal fee to ensure you meet the IRS filing requirements. You may also consider filing Form 990-T if you have a loss, as it might benefit you in future years.

Call your First Class Service Team for more information.