IRAs and tax on unrelated business taxable income.
Not all earnings within an IRA account are tax free or tax deferred. If you invest in your IRA funds in a business including
ownership interest through a partnership or S corporation, you may be subject to "Unrelated Business Taxable Income" (UBTI).
UBTI includes net income form debt-financed investments such as mortgaged property. Thus if you own a rental property within
an IRA that carries a mortgage, you are subject to the UBTI. This UBTI applies to IRAs, SEPs, Simples, ROTH IRAs, ESAs and MSAs.
If you are subject to this UBTI a tax return is required and estimates tax payments.
updated 2/2/15