For those who are not familiar, UBTI is an acronym standing for Unrelated Business Taxable Income.
The offerings found on our Marketplace employ debt financing, which means there could be UBTI exposure for investors.
Broadly speaking, ordinary income trade or business activity will be subject to UBTI. So if a developer treats income as ordinary income trade or business activity on their tax return, they can ultimately pass through the UBTI exposure to the investors in the particular offering, meaning the taxable income will flow down to the individual investors.
CrowdStreet and its affiliates do not provide tax advice. We encourage investors and prospective investors to consult with a tax professional prior to investing for more information.
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