This is the first article (see What is Unrelated Business Tax?) I’ve read that actually explains the background behind Unrelated Business Taxable Income (UBTI)! Unfortunately, I think this 70 year old tax now extends much further than it was intended. UBTI is a tax that must be paid, even if you’re a tax-exempt or tax-deferred (i.e. IRA) entity. In the investment world, UBTI is the resulting tax of investment profits made on leveraged assets.
CNA Capital will allow its clients to use their self-directed IRAs to invest in one of our offerings - just know that this requires extra planning. Contact us if you want more information on how to setup a self-directed IRA for yourself.