What is UBIT? When does it occur? And how can I remain compliant?
If your IRA owns an asset or interest that produces unrelated business taxable income (UBTI), your IRA may be subject to an unrelated business income tax (UBIT) pursuant to Section 511 of the Internal Revenue Code.

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Is My IRA Responsible for UBIT?
Unrelated business income tax applies if ALL of the following are true:
- Income is derived from “trade or business” activity (i.e., sale of goods and services).
- Business activity is not substantially related to exempt status.
- Business is regularly carried on by organization.
Generally, IRA investments that can generate unrelated business income tax include:
- Limited Partnerships (LPs)
- Limited Liability Companies (LLCs)
- Any investment that incurs debt financing and/or is involved in an unrelated business