Tax: UBIT and UDFI

When a tax-advantaged account owes tax anyway, and who decides.

• Does a solo 401k avoid UDFI on leveraged real estate?
  In most real estate cases, yes. Qualified plans get a statutory exception for debt-financed real property that IRAs do not get, so a solo 401k can use a mortgage on ...
• UBIT explained: when a tax-free account owes tax
  UBIT is unrelated business income tax. A retirement account owes it when it earns income from an active trade or business rather than from passive investment, or fro...
• UDFI: what a mortgage does to your IRA's taxes
  UDFI is unrelated debt-financed income. When your IRA buys property with borrowed money, the percentage of the income attributable to that debt becomes taxable to th...