Are Your Alternative Investments Generating Taxes?

Image of UBTI for EBP white paper

Alternative investments offer attractive features for employee benefit plan sponsors. Investments in real estate, businesses, and partnerships tend to yield higher rates of return compared to traditional investment vehicles like stocks, bonds, and mutual funds. But those alternative investments could also come with tax consequences. Plan sponsors may not be aware that their plan investments are generating unrelated business taxable income (UBTI), which could lead to compliance issues.

Unexpected UBTI & the Flip Side to Alternative Investments in Your Benefit Plan takes a closer look at tax consequences, illustrating:

  • Which plan investments may generate UBTI
  • How to report UBTI
  • Options available to mitigate UBTI in plan investments

Trends in plan investment mix and changes in the tax reform law may make UBTI a bigger issue for plan sponsors than it was in the past. Our white paper is designed to help plan sponsors understand how the tax on unrelated business income may affect their plan and what they can do to minimize tax compliance risks.