Blog for John Sweeney - Elder, Wills, Estates, Trusts, Special Needs, Business, & Tax Lawyer in CT and NY

Can You Have Taxes in Your IRA

Posted by John Sweeney | Mar 20, 2017 | 0 Comments

The answer is, surprisingly, yes, you can have taxes in your IRA.

Normally, IRAs invest in stocks, bonds, mutual funds, and ETFs and receive interest, dividends and gains from these.

Congress felt that non-taxable entities shouldn't unfairly compete with taxable firms.  Therefore, they are taxed on income from "Business Income" (in tax parlance UBTI).  UBTI is taxed at trust rates.  The top rate is 39.6% and kicks in quickly.

Taxes are triggered by non traditional assets like hedge funds, private-equity funds, limited partnerships, operating businesses and real estate.

So, before you invest in an non-traditional asset in your IRA, ask if it will be taxable.

About the Author

John Sweeney

John is an experienced lawyer who helps you solve your problems. He practices Elder, Wills, Estates, Trusts, Special Needs, Business, & Tax Law in Fairfield County CT and Westchester County New York. He brings a wealth of experience in law, business, tax, insurance, and finance to arrive at practical solutions with compassion and care. Honest, direct and practical, he is focused on you and your problems. He also brings a wealth of personal experience from his own large family and aging parents.


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Elder, Wills, Estates, Trusts, Special Needs Tax & Business Law; Attorney John Sweeney

Sweeney Legal, LLC, provides legal, practical, and business counsel to Seniors, families, and businesses in the Fairfield, Connecticut area, including the communities of Bridgeport, Bethel, Brookfield, Danbury, Darien, Easton, Fairfield, New Canaan, Newtown, Norwalk, Redding, Ridgefield, Stamford, Weston, Westport and Wilton. John is also licensed in New York serving Westchester County including the towns of Bedford, Lewisboro, Mount Kisco, North Salem, Pound Ridge, and Somers.