Unrelated Business Taxable Income (UBTI) is income earned by a tax-exempt entity (including IRAs and 401(k)s) from an active trade or business rather than passive investments. When UBTI exceeds $1,000 in a year, the account must pay Unrelated Business Income Tax (UBIT). Common triggers include income from leveraged investments (see UDFI), certain partnerships, and operating businesses held in the account.