Decoding and Understanding Unrelated Business Income Tax (UBIT)


You may have recently received a notice indicating that your IRA may have incurred unrelated business income tax, or UBIT for short. UBIT applies to certain investments within an IRA and needs to be accounted for by filing Form 990-T.
 
UBIT Education Resources
 
Would you like to learn more about UBIT, including but not limited to the following:
  • What is UBIT?
  • When does it occur?
  • How does it relate to my IRA investments?
  • How can I remain compliant?
We have created video training and downloadable reports for you, your tax professional, or other members of your financial team that can be accessed here.
 

Your 3 Options for UBIT Compliance

 
To assist you in meeting filing requirements, Equity Trust Company is again offering Form 990-T preparation and IRS required electronic payments through the EFTPS (Electronic Federal Tax Payment System) to our clients for their IRAs.
 
Please select one of the three required options and follow the instructions for the applicable forms referenced below.
 
You may complete and submit them to Equity Trust Company at etc990@trustetc.com. If you have incurred UBIT within your IRA you must select one of the three options and respond on or before April 15, 2014.

  • I understand that all income and expenses pertaining to the property must be deposited in and paid from my IRA. If I use a Property Manager, I will forward their year-end statement for income and expenses. There are no additional forms necessary to send at this time when selecting this option.
If you decide not to have Equity Trust Company prepare the Form 990-T and choose to do it yourself, have a qualified professional do it for you, or have less than $1,000 in total combined taxable income and do not wish to carry forward a loss to offset possible future gains, we have provided several resources that can assist you. Please browse the videos and whitepapers below or share them with your financial team to gain a better understanding of UBIT and how it may relate to your current or potential IRA investments.

3) My account has generated less than $1,000 total combined taxable income.