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Unrelated Debt Financed Income (UDFI) Rules

UDFI

Internal Revenue Code Section 514 requires debt-financed income to be included in unrelated business taxable income.  These are known as the Unrelated Debt Financed Rules or UDFI. What is UDFI? Under Internal Revenue Code Section 514, if an exempt organization, such as an IRA owns “debt-financed property,” some portion of each item of gross income […]