Unrelated Business Taxable Income
Unrelated Business Taxable Income (UBTI) is usually generated by a tax-exemption that is related to its main function as being tax free. However, income not related to the main function of the entity may be taxable.
UBTI in an individual retirement account (IRA) is an alternative investment that can produce UBTI of $1,000 or more and may be taxable to the IRA owner. Examples of when UBTI is usually generated include when businesses that are owned by the IRA and when the IRA invests in a limited partnership.
Life insurance for employees covered under a qualified plan can be purchased and owned by the plan with tax-deductible employer contributions. A qualified plan that is overfunded or close to full funding, may wish to add incident life insurance coverage to allow for higher deductible contributions to the plan.
Life insurance within a qualified plan can be used to help owners and other highly compensated participants to meet substantial estate taxes.
Life insurance may be used as a secure means of funding an employer-sponsored retirement plan.
Provides predictable plan costs for the employer.
"Pure insurance" component of a qualified plan (death proceeds minus cash values) is free from income tax.
Low rates of return compared to other investments.
Policy expenses and commissions may be greater than other investments.
RetirementWhat are the pros and cons of owning cash value life insurance in a qualified retirement plan?
Financial AdvisorAs the old saying goes, you can't take it with you. For this reason, it is important to have a current estate plan in place to protect your family and belongings.
TaxesKnowing the tax deductions you're entitled to can make or break your bank account. Do you know about all these insurance-related deductions?
InsuranceLearn about the tax implications of life insurance premiums, including when they might be taxable and whether they are tax deductible.
Financial AdvisorWealthy clients have an enviable problem — managing, preserving and growing wealth. Properly structured life insurance can help with these goals.
Financial AdvisorTop things you need to know when it comes to managing the complex task of retirement account withdrawals.
TaxesTaxable income is the net of gross income and allowable deductions.
RetirementLearn how the passed bill can help you save more for retirement.
RetirementIt may be better to leave your assets exposed to the tax man when you're saving to retire.
RetirementInvestors are now able to invest directly in real property, mortgages and other assets.