I see they indicate the divy is not subject to fed and state tax?? I just added it to my income
as a divy and paid taxes..Now they are sending out notices that these taxes don't apply..??
Well the UBTI is calculated based on the annual weighted number of shares held, not a specific dollar investment amount. I did some quick math (which could be off) and figured UBTI to be around $1 of UBTI for every 35 shares held or so. Assuming $15/share then about $1 of UBTI for every $525 invested, or $2 of UBTI for approx. $1,000 of holdings. Hope that helps.
Paul_85 or anyone,
Can you tell me your amount of UBTI per $1000 of holdings? I, too, want to buy some in a 401K, but would like to keep the amount low enough such that I don't trigger the $1000 threshold.
Yes, there is a small amount of unrelated business taxable income but it figures out to a minimal amount. I hold my shares in an IRA so it is of mild concern but would need to hold a huge number of shares to reach the $1000 of UBTI that requires filing an income tax form and paying the tax on the excess. If that were to happen, I would gladly pay the tax. My broker/trustee takes care of filing the tax form if necessary without charge.