IRS Releases Updated Draft 2025 Form 990-T

The Internal Revenue Service has released an updated 2025 tax year draft Form 990-T, Exempt Organization Business Income Tax Return. The form is used to, among other items, report unrelated  business taxable income (UBTI), figure and report unrelated business income tax liability, and request a credit for certain federal excise taxes paid or for small employer health insurance premiums paid.
 
One of the circumstances requiring the filing of this form occurs when an IRA holding an investment, or an interest in an investment, generates revenue apart from the value of the asset itself. For example, ownership of a retail business would likely generate revenue from ongoing sales of that business’s products or services. That revenue would be considered UBTI. 

Unlike dividends or appreciated market value or interest, which generally grow tax-deferred in an IRA, UBTI is taxed on a current-year basis. Form 990-T is filed to report and pay UBTI tax.