What determines the taxation rate applied to profits for financed properties?

A qualified plan (such as the Solo 401k) is exempt from the UBTI related to buying property with financing.

For an IRA LLC however, the taxation rate is determined by the amount of leverage you’re using. For example, if eighty percent is leveraged and twenty percent of cash is put into the property, then eighty percent of the income/eighty percent of the gains will be taxable.

For calculating UBTI tax and preparing the relevant forms, always consult your CPA or tax advisor.