Glossary
UBTI (unrelated business taxable income)
Income that a US tax-exempt investor, such as an endowment or pension, must pay tax on despite its exempt status — commonly arising from debt-financed investments or operating businesses held through pass-through entities.
In practice
Funds with tax-exempt LPs often use blockers to prevent UBTI and disclose UBTI on K-1s.
In FUN/D
FUN/D keeps investor tax status so UBTI-sensitive investors can be identified and reported correctly.
Related: Blocker corporation · Schedule K-1 · ECI · full glossary
See how FUN/D handles this on your fund.
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