Real Estate held in ROTH owes UBIT Tax?

[Unregistered]

When is gain on an asset held in a Roth account (more than 5 years etc) taxable? I have seen some references to something called a UBIT tax.

UBIT = Unrelated Business Income Tax

Designed by the IRS (kind of an oxymoron) to close some loop hole on non-profit entities there is suppost to be something called the UBIT that taxes gain unrelated to the non-profit activity. Somewhere I read that Real Estate held in a Roth must report and pay tax on some portions of profit and I think it was yearly so therefore not on the gain from a sale but from rents or some such.

However, theTaxBook has no index entry for UBIT and I wonder if anyone out there has a source that explains this situation

Thanks...Don

[Bird Legs]

Ubit

Try doing a Google search. Type in UBIT then tell it to go search.

[JON]

Look it up but

Real estate investment itself does not create UBTI, UNLESS there are mortgages/debts involved than it is prorated. During the time period held the if a rental activity I do not think that creates anything, but if there is financing of the activity or investment then you have to do something to prorate the income/loss of the activity. Google is a good idea...

[MPlaks]

JON is correct.
Holding by itself does not trigger UBIT. Having those properties financed does.
There are also other activities inside an IRA that can invoke UBIT.

Some good info is posted at

https://www.entrusttexas.com

Good luck!