"Ira Smilovitz" <iras1[at]aol.com> wrote:
- quote -

I understand that the IRS takes that position. What I don't
understand is the legal basis. How could any investment be
unrelated to its exempt purpose when it's purpose is to make
investments?

Stu

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"Stuart A. Bronstein" <spamtrap[at]lexregia.com> wrote:
- quote -

IRA's most certainly can have UBTI. See, for instance, the
instructions for Form 990-T.

Ira Smilovitz

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Stuart A. Bronstein wrote:

- quote -

Yep. http://www.aicpa.org/PUBS/jofa/april97/taxbrfs.htm has
a quickie explanation. UBTI is also the reason IRAs
generally don't invest in real estate; the profits there are
all from leverage, and mortgaged real estate kicks off UBTI.

Phoebe

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"Stuart A. Bronstein" <spamtrap[at]lexregia.com> wrote:
- quote -

Sorry, I thought you said URBI.

Stu

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"Benjamin Yazersky CPA" <john...[at]nowhere.com> wrote:
- quote -

Thanks to all
My K-1 form shows my name/address for Part II-H "Partner's
name", but for the "Partner's Identifying Number" in Part II
- G is not my SS/TaxId it is the TaxId for my IRA account
broker, e.g. charles schwab. Also there's no UBTI income
shown in Part III-20 and the other amounts in Part III are
all small (< $100). So based on your responses I can ignore
the IRA K-1 on my return.

I know several other friends/colleagues also owned USO (a
hot stock last year) in there non-IRA accounts. Many of them
already filed their 2006 returns and were surprised to
receive a 2006 K-1 from USO this week. An important lesson
is don't buy an exchange traded fund unless you verify that
it is not a "partnership".

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"Phoebe Roberts, EA" <Phoebe[at]RobertsCPA.com> wrote:

- quote -

Can an IRA have UBTI? An IRA's exempt purpose is to invest
and to grow. What could be unrelated to that and still
generate income?

Stu

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Phoebe Roberts, EA wrote:
- quote -

I would like to hear your reasoning. Most PTPs seem to have
negative UTBI. But if I am making a dumb mistake, I can't
blame the broker.

I do fear that at some time I will get hit with the UBTI
~30% tax plus probably a fee for filing the tax. I think I
understand that aspect to a point. If I could keep the UTBI
under $1000 in a year, then no problem.

What I am ignorant of is, suppose I reach a point where
depletion does not offset any more, the basis has dropped to
zero, and I then sell the PTP that is in the IRA, am I going
to have a big tax event where the depletion is suddenly
recaptured as UBTI?

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<nearly_blind[at]yahoo.com> wrote:

- quote -


Although I am not familiar with that particular entity, I
think the answer is who is the shareholder/investor in it.
Whose name is on the K1 should help to determine if it is
taxable to you or not.

You may want to consult with your CPA/tax advisor.

___________________________________
<<< Benjamin Yazersky, CPA [NJ & NY] > > -----> real address on hobokeni or hobokenx <-----

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nearly_blind[at]yahoo.com posted:

- quote -

Anything held within an IRA is deemed to be owned by a
separate entity, and not subject to taxes until
distributions are taken.

So long as the ownership is properly titled, i.e., "XYZ,
TTEE FBO IRA of N_B" (or something to that effect) ... there
should never be a question.

Bill

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nearly_blind[at]yahoo.com wrote:

- quote -

Grrrr. I always yell at brokers who do that.

It belongs to the IRA, and has absolutely nothing to do
with your tax return. If the IRA has enough UBTI (Box 20,
Code V), your IRA might have to file a tax return, and pay
tax. If you didn't know that already, your IRA has no
business owning PTPs.

Phoebe

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I owned the exchange traded oil fund USO in my traditional
IRA last year (2006).

Apparently its really a L.P. or publically traded
partnership (PNP) and I just received Schedule K-1 from USO.
Do I need to include this info in my 2006 return or can I
avoid this because it was held in an IRA?

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