UBTI - QBI - Self directed IRA

This is a hypothetical question - If a client has a self-directed IRA that has invested in a rental real estate, if the income is determined to be QBI at the LLC level, does that convert what would ordinarily not be UBTI to UBTI?

Generally under IRC Section 512(b)(3), rents from real property are excluded from unrelated business taxable income. Real property is land and any buildings or other structures permanently attached to land, and includes any property described in IRC Section 1245(a)(3)(C).

If the real estate enterprise at the LLC level rises to the level of a trade of business under QBI does that also make it UBTI?

If the real estate enterprise at the LLC level rises to the level of a trade of business under QBI does that also make it UBTI?

Why do you think it would? Have you read anything in IRC Sec 512 or the regs referencing Sec 199A as a caveat?

Is the real estate leveraged? If yes wouldn't it have UBTI via UDFI (Sec 514) as it's an SDIRA and not a Solo 401k?

Does SDIRA vs Solo 401(k) make a difference for UBTI?

Does SDIRA vs Solo 401(k) make a difference for UBTI?

UDFI I believe.

See Sec 514. Particularly Sec 514(c)(9)(C).

This assumes the retirement plan holds the rental real estate asset directly or via a disregarded entity. If the interest is held through a MMLLC taxed as a partnership I'm pretty sure a Solo 401k has UDFI (UBTI) exposure as well if the fractions rule is violated.