Bob Smith asked 2 years ago
One of my side hustles is targeting and locking up raw land, doing the regulatory and permitting work and then selling or assigning a “ready-to-build” lot. I do this one building parcel at a time, with an occasional minor subdivision. This accounts for 25% of my regular income, building a house a year accounts for another 25% and my regular job (government attorney) accounts for the remaining 50%.
PLR 8950072 seems to suggest that my SDIRA would not be subject to UBIT because I am not making physical improvements. However, sometimes I do sell to members of the general public — although my numbers are only a few a year.
Under this Private Letter Rule and Adams, do you think I can safely avoid UBIT if the number of land flips are kept under 5, I perhaps hold for a year (sometimes permits take that long in New Jersey) and I am not doing any physical improvements to the land?
Your Podcast is excellent! Thanks for the information.
Bob Smith