UBTI and UBIT in IRAs and Qualified Plans: Identifying Unrelated Business Taxable Income and Avoiding UBTI Tax Traps

Recording of a 110-minute CPE webinar with Q&A


Conducted on Wednesday, August 24, 2016

Recorded event now available

or call 1-800-926-7926
Program Materials

This webinar will give nonprofit tax professionals and advisers a thorough guide to recognizing and reporting unrelated business taxable income (UBTI) as it pertains to IRAs, qualified plans and other retirement accounts. The webinar will focus on the standards and guidelines for determining whether income derived from assets held by a qualified plan is UBTI and thus subject to tax, and will provide a detailed exploration into calculating UBTI and reporting the resulting unrelated business income tax.

Description

While the default treatment of IRAs and other qualified retirement plans is to defer income tax on any accumulation in asset value until distributions are taken, certain types of income and transactions within an ordinarily exempt/deferred plan are subject to current income tax. An IRA or other plan that receives UBTI over a specified threshold is required to report the income and pay unrelated business income tax on the UBTI.

The most obvious circumstances where UBTI would apply to a qualified plan are in self-directed IRAs owning real estate or closely held business assets, particularly where debt financing is involved. However, assets such as master limited partnerships (MLPs), which are traded on a public exchange, can generate UBTI and result in unforeseen tax filing and payment obligations.

Tax advisers need to know the complex UBTI rules as they pertain to qualified retirement plans. Failure to recognize and account for UBTI in a tax-deferred plan can lead to a host of negative tax consequences, including tax, penalties and disallowed contributions.

Listen as our experienced panel provides practical guidance on the tax consequences of UBTI in qualified retirement plans, offering detailed instructions on identifying UBTI-generating assets and discussing filing and payment requirements arising from UBTI in qualified plans.

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Outline

  1. UBTI generating assets in IRAs and other qualified plans
  2. Self-directed IRA reporting
  3. IRA trusts and other vehicles holding UBTI assets
  4. Identifying and calculating UBTI
  5. Filing Form 990T

Benefits

The panel will discuss these and other important topics:

  • What assets and structures will generate UBTI?
  • How do MLPs held by an IRA impact UBTI reporting and payment requirements?
  • What are the estimated payment rules for qualified plans with unrelated business income tax liabilities?
  • Unrelated debt-financed income (UDFI) rules and treatment of qualified plan assets financed by debt
  • What factors should account holders be especially aware of in cases where the plan holds UBTI-generating assets?

Faculty

Bill Humphrey
Bill Humphrey

Co-founder and CEO
New Direction IRA

Mr. Humphrey is recognized in the industry as an expert in self directed IRAs, HSAs and other tax-advantaged accounts,...  |  Read More

Israel Tannenbaum
Israel Tannenbaum
Senior Manager
WeiserMazars

Mr. Tannenbaum advises not-for-profit clients in a range of sub-sectors, specializing in delivering insightful,...  |  Read More

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