Seller Financing SDIRA Owned Property

[Robert Leonard]

I have an SDIRA owned property that my SDIRA owns free and clear. My original intent was to hold it as an income producing property, but I need to sell it and I expect to pay UBTI because I only bought it in July. How will it affect the UBTI if I offer seller financing and do not receive the "profit" until later?

Example: Purchase/rehab cost = $60k Sell for $80k Cash vs Same Cost but Sell for $80k Seller Financed ($40k down payment with $40k note)?

I realize this is not the best way to use SDIRA funds, but I'm working to convert what turned into an active investment into a note (passive investment). At this point, I want to minimize the tax penalty for effectively flipping this property if that's possible?