UBTI?

[Guest Jim Brennan]

A plan purchases stock in an LLC. Is the income from the LLC subject to UBTI?

[Guest ESOPwizard]

If your LLC is being taxed as an S corp, see IRC 512(e). If it is being taxed as a partnership, the income will be UBTI, unless the income is in an excluded class under IRC 512(b), unless there is acquisition indebtedness that turns the income into UDFI.

I recommend that you talk to someone who understands this stuff being making the investment. ( and don't forget about the prohibited transaction rules. Will the purchase be a related party transaction?)

[Guest AFRICA]

If you invest your plan assets in a LLC, you will pay UBTI tax only if the UBI is in excess of $1000.00. The IRS Form 990t gives a detailed explanation of whne taxes will be due on income on UBI. The IRS also hs pubication totally dedicated to this topic ( cont' remember the number right now- but it can be locate at WWW.IRA.USTREAS.GOV - go to forms and publications).

Hope tis helps.

Africa

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AFRICA6796@AOL.COM/email]

[Guest AFRICA]

reposting with te correc IRS web adress

~O~

If you invest your plan assets in a LLC, you will pay UBTI tax only if the UBI is

in excess of $1000.00. The IRS Form 990t gives a detailed explanation of whne

taxes will be due on income on UBI. The IRS also hs pubication totally dedicated to this topic ( cont' remember thenumber right now- but it can b located at WWW.IRS.USTREAS.GOV - go to forms and publications).

Hope this helps.

Africa

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AFRICA6796@AOL.COM/email]