A specific type of UBTI triggered when a retirement account earns income from property or investments purchased using debt financing (like a non-recourse mortgage). If your SDIRA buys real estate with a loan, a proportionate share of the rental income and capital gains becomes subject to UBIT. This is an important consideration for leveraged real estate investments in self-directed accounts.
Back to Glossary
UDFI (Unrelated Debt-Financed Income)
Tax RulesThis site may contain affiliate links. We may earn a commission if you sign up through our links, at no extra cost to you. Content is for educational purposes only and is not financial, investment, tax, or legal advice. Consult a qualified professional before making financial decisions.