Most sites that I have looked at make very broad statements about all IRA gains being shielded from taxation. For example, RothIRA.com makes the following statement about traditional and Roth IRAs:
with both types of IRAs, you pay no taxes whatsoever on all of the growth of your contributed funds, as long as they remain in the account
However, this article on The Motley Fool website makes a distinction between trading stocks for C corporations versus others (S corporations and LLCs specifically) within an IRA. It claims that trading S corporation and LLC stocks often results in UBTI and that:
when you hold shares of this type in a tax-advantaged account like an IRA, it could mean your IRA is subject to paying UBTI. Under current IRS rules, if your IRA earns more than $1,000 in total UBTI in a tax year, you must pay income tax on those earnings. Most people therefore tend to avoid holding these sorts of investments inside an IRA. And while it shouldn't necessarily rule out every potential investment of this type, the cost in taxes may keep these investments from being the best choice for your IRA.
Unless I am reading this incorrectly, it seems to claim that there can be income tax resulting from IRA investments.
In addition, the opening section of the article qualifies each statement about taxes with the phrase "in most cases," as if they are being very careful to not give a blanket statement.
So, The Motley Fool article claims that "most people" are avoiding certain IRA investments because they're taxable, but the RothIRA.com article claims that there are "no taxes whatsoever". What am I missing?
Is it true that only C corporation stocks are shielded from taxation within an IRA? Could someone owe income tax from their IRA investments?