What is the UBTI tax rate?

Internal Revenue Code Section 511 taxes “unrelated business taxable income” (UBTI) at the rates applicable to corporations or trusts, depending on the organization's legal characteristics. Generally, UBTI is gross income from an organization's unrelated trades or businesses, less deductions for business expenses, losses, depreciation, and similar items directly connected therewith.

A Self-Directed IRA subject to UBTI is taxed at the trust tax rate because an IRA is considered a trust. For 2016, a Solo 401(k) Plan subject to UBTI is taxed at the following rates:

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