Unrelated Business Income
What is the determination or criteria as to whether an investment is considered unrelated business income and therefore not allowed in an IRA or Individual 401k? A client of mine wants to do hard money lending within his IRA…..
Permalink Submitted by Denise Appleby on Thu, 2008-09-25 05:48
Investments that create UBI can be held in an IRA, as long as the investment does not create a prohibited transaction. However the UBI may be taxable.
See http://www.retirementdictionary.com/unrelated_business_taxable_income.htm , which includes links to the IRS publications and tax code that addresses UBI and UBIT