Unrelated Business Taxable Income

Unrelated Business Taxable Income (UBTI) is the tax placed on the income derived from unrelated business activities within a retirement trust.

The following is a list of investments that may generate UBTI:

• Limited Partnerships (LPs)
• Limited Liability Companies (LLCs)
• Investments that incur debt financing

Generally, the investment will forward an IRS Schedule K-1 to the trustee of the retirement trust each year. If the retirement trust receives over $1,000 of UBTI in a year, the trust should file an IRS Form 990-T and pay the additional tax.

For further questions, please contact your financial advisor or CPA.