What are the unrelated business taxable income (UBTI) implications for TYG, TYY, TYN, TTO, TPZ and NTG investors?
United States tax-exempt investors, including employee benefit plans, pension funds, private foundations, 401ks and IRAs, are subject to tax on their UBTI. Distributions paid by corporations (such as TYG, TYY, TYN, TTO and NTG) or regulated investment companies (such as TPZ) are specifically excluded from UBTI. Thus, distributions from TYG, TYY, TYN, TTO, TPZ or NTG are not treated as UBTI and tax-exempt investors are not subject to Federal income tax on such income, unless the stock is debt financed. If the stock is debt-financed, the net dividend income will be treated as UBTI.
