Tax Return for UBIT – Does your retirement plan own leveraged real estate or an active business?

Just a quick, last-minute reminder…

  • If your IRA owns mortgage-leveraged real estate, you owe UBIT.
  • If your IRA or 401(k) owns an active business structured as a pass through entity (such as an LLC or partnership), you owe UBIT.
  • If your 401(k) owns mortgage-leveraged real estate AND the mortgage is a “seller carry”, you owe UBIT.

UBIT, or Unrelated Business Income Tax, applies to tax exempt organizations including retirement plans. To pay UBIT, Form 990-T must be filed with the IRS. If this is all news to you, once you are done scolding yourself, you may want to file for an extension using Form 8868.

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