Should I be worried about the UBIT / UBTI tax and an SDIRA?

[Nathan Williams]

Hi All,

I am interested in transferring funds from my IRA held at a brokerage firm to a SDIRA with a custodian. I've done my homework on SDIRAs and I am aware of the benefits and the restrictions. However, my tax attorney is advising me against it due to the possibility of the UBIT / UBTI tax being triggered. So far, it is not a risk. But, if it is triggered it looks like it could be painful

Can anyone shed some more light on this? Has anyone opted out of this investing strategy due to this possibility? Here is an article from Forbes that explains in detail the risk:

https://www.forbes.com/sites/greatspeculations/2015/07/15/beware-unintended-tax-consequences-of-unrelated-business-income/#7b6970f926b7