Archive for the ‘Prohibited Transactions’ Category

Lending Funds to a Related Corporation is a Solo 401(k) Prohibited Transaction

August 9th, 2017

Zacky v. Commissioner, TC Memo 2004-130 The Zacky case involved three separate loans all of which were prohibited transactions under Section 4975(c)(1)(B), (D) and (E). The taxpayer, Mr. Zacky, was the president and sole owner of Aspects Inc. (“Aspects”), a corporation that maintained a qualified profit sharing plan. Mr. Zacky was one of many participants […]

Read More →




Case Seems to Suggest an IRA Holder Could Not Be Considered a Fiduciary, But IRS Guidance Suggests Otherwise

July 17th, 2017

Greenlee v. Commissioner, T.C. Memo 1996-378 When a plan trustee participates in the decision to cause a plan to make a loan to an entity in which the trustee owns a significant ownership interest, the IRS will likely consider the loan a prohibited transaction, as it did in Technical Advice Memorandum 9119002.  In the Greenlee […]

Read More →




Purchasing Corporation Stock That is Not Deemed a Disqualified Person May Not Be a Prohibited Transaction

July 7th, 2017

ERISA Advisory Opinion Letter 89-03 In this opinion a husband and wife, Mr. and Mrs. Bowns, Frances, owned a small amount of shares in a corporation personally.  Mr. Bowns was also an officer of the corporation and general manager of one of its business divisions.  In addition, Mr. and Mrs. Bowns established IRAs.  They were […]

Read More →




IRA Financial Group Announces New Self-Directed IRA Prohibited Transaction Review Service

June 28th, 2017

New self-directed IRA prohibited transaction review service will be offered to all IRA Financial Group clients IRA Financial Group, the leading provider of “checkbook control” self-directed IRA and solo 401(k) Plans, announces the introduction of a self-directed IRA prohibited transaction review service. IRA Financial Group’s new self-directed IRA prohibited transaction review service will be available […]

Read More →




What Happens When You Use Your IRA in a Prohibited Transaction?

May 30th, 2017

The Internal Revenue Code does not describe what a Self Directed IRA can invest in, only what it cannot invest in. Internal Revenue Code Sections 408 & 4975 prohibits Disqualified Persons from engaging in certain type of transactions. The purpose of these rules is to encourage the use of IRAs for accumulation of retirement savings […]

Read More →




Solo 401k Plans and Disqualified Persons

November 14th, 2016

The IRS has restricted certain transactions between the Solo 401(k) plan and a “disqualified person”. The rationale behind these rules was a congressional assumption that certain transactions between certain parties are inherently suspicious and should be disallowed. The definition of a “disqualified person” (Internal Revenue Code Section 4975(e)(2)) extends into a variety of related party […]

Read More →




Self Directed IRA Prohibited Transaction Rules and Disqualified Persons

October 13th, 2016

The Internal Revenue Code does not describe what a Self Directed IRA can invest in, only what it cannot invest in. Internal Revenue Code Sections 408 & 4975 prohibits Disqualified Persons from engaging in certain type of transactions. The purpose of these rules is to encourage the use of IRAs for accumulation of retirement savings […]

Read More →




Self-Directed IRA Prohibited Transaction Case Law Update: Guy M. Dabney, et ux. v. Commissioner, TC Memo 2014-108

July 15th, 2016

The Internal Revenue Code does not describe what a Self Directed IRA can invest in, only what it cannot invest in. Internal Revenue Code Sections 408 & 4975 prohibits Disqualified Persons from engaging in certain type of transactions. The purpose of these rules is to encourage the use of IRAs for accumulation of retirement savings […]

Read More →