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Can an IRA be taxed?
The Motley Fool article is correct that if you earn UBTI over $1000, you will need to pay the tax, even if held in an IRA.   C-corps won't generate UBTI, so you're fine with those.  For non-C-corps, the most common are REITs, MLPs, and BDCs.   REITs  These typically invest in either real estate property or mortgages.  The ones that invest in mortgages are sometimes notated: mREITs, and can occasionally generate UBTI.  Tip: Don't let this stop you from investing in REITs in your IRA.  REITs can be a great source of income and are best held in an IRA since the income will be tax free vs. your ordinary income tax bracket if held in a taxable account.  Some examples of mREITs would be NLY, CIM, AGNC.  Some property REITs would be: O, SNR, OHI, EQR. https://seekingalpha.com/article/1257351-tax-bomb-mortgage-reits-triggering-ubit MLPs Master Limited Partnerships are also pass-through entities, like REITs, but have the additional complication that most issue K-1 forms at tax time.  K-1s can be very complex when the MLP owns assets across state boundaries, which is why I actually PREFER to hold MLPs in my IRA (against the advice of M. Fool) since I won't have to deal with the tax complications of filing the K-1, just as long as my MLPs don't generate over $1000 of UBTI. https://seekingalpha.com/article/4057891-mlps-kminus-1s-ubti-oh BDCs Business Development Companies like REITs and MLPs are also pass-through entities in that the income they give you will be taxed at your ordinary income bracket if held in a taxable account.  Examples of BDCs include: MAIN, MCC, ARCC.  You'd need to consult their 10-K to determine if there is a risk of UBTI. Tip:  MLPs, BDCs, and especially REITs can all be very valuable sources of income and from my experience, UBTI is rare so don't let that scare you away if you otherwise like the investment.