A qualified plan (such as the Solo401k) is exempt from the UBTI related to buying property with financing.

For an IRA LLC – the taxation rate is determined by the amount of leverage you’re using. For example: eighty percent is leveraged and put twenty percent of cash is put into the property with eighty percent borrowed, then eighty percent of the income, eighty percent of the gains will be taxable.

For calculating UBTI tax and for getting forms prepared, always consult your CPA or tax advisor.

Did this answer your question?