UBIT in Your IRA? What That Surprise Tax Notice Actually Means

That surprise notice from your IRA custodian? It might be about something called UBIT—and if you’ve got limited partnerships or master limited partnerships in your IRA, you’ll want to pay attention.

This week, Jeremiah and Nic explain what Unrelated Business Income Tax (UBIT) is, how it gets triggered inside your IRA, and what it means for your bottom line. They break down how UBIT is calculated, what types of investments commonly set it off, and whether or not you should be concerned if you’ve received a Form 990-T notice.

Is UBIT a reason to dump those high-yield investments in your retirement account? Not necessarily—but you do need to understand when the IRS comes calling and why.

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Jeremiah Bates & Nic Daniels