Wrong Plan Investments Can Create Unrelated Business Tax Income
Practical Tax Strategies/Taxation for Accountants (WG&L) Taxation for Accountants 1997 Volume 58, Number 6, June 1997
5 Pages Posted: 4 Dec 2013
Date Written: June 1, 1997
If an exempt employee trust invests in an asset producing unrelated business taxable income, not only will the trust become taxable, but the trustee may have personal liability for mismanaging the trust's funds. Most tax practitioners have not been concerned with these UBTI provisions in relation to IRAs and pension plans, since they are usually a concern of charitable and other exempt organizations or trusts. Recently, an IRS ruling emphasized the importance of being careful when dealing with self-directed IRA and pension investments to avoid the potential surprise of UBTI problems.
Keywords: retirement plan, ubti, employee retirement trust
JEL Classification: H21, H24, K34
Suggested Citation: Suggested Citation