Can I use a self-directed IRA to do the structure?

No. ERISA Section 408(e) provides that ERISA Section 406 shall not apply to the purchase by the Plan of qualifying employer securities (as defined in ERISA Section 407(d)(5)), provided that: (1) the acquisition or sale is for adequate consideration; (2) no commission is charged with respect to the acquisition or sale; and (3) the plan is an eligible individual account plan (as defined in ERISA Section 407(d)(3)). ERISA Section 407(d)(3) excludes IRAs from the definition of “eligible individual account plans.” A 401(k) plan fits in to this definition but not an IRA.


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