Questions to Ask Before Making a Self-Directed IRA Investment
One should consider the IRS prohibited transaction rules, the UBTI tax rules, and how best to structure the investment.
Self-Directed IRA Rules Investors Commonly Break
Self-directed IRA rules do exist, and it’s important to know these rules to keep your IRA IRS compliant. Such rules include prohibited investments and disqualified persons.
The Rollins Case & The Self-Directed IRA Prohibited Transaction Lesson
Learn from the Rollins case: Prohibited transactions can happen unintentionally with non-disqualified entities. Understanding the rules is crucial to avoid IRS issues.
Peek v. Commissioner – Important IRA Loan Rules
In Peek v. Commissioner, the Tax Court ruled that a personal guarantee of a loan by a corporation owned by the individual’s IRA is a prohibited transaction.
ROBS Prohibited Transaction Rules
What are the ROBS Prohibited Transaction Rules? The IRS-prohibited transaction rules are not triggered in a rollover business start-up (ROBS) solution. The ROBS solution allows one to use their IRA or rollover 401(k) funds to purchase stock in a C Corporation that they are personally involved in without triggering the IRS-prohibited transaction rules. Whereas, if […]
Correcting a Prohibited Transaction
When correcting a prohibited transaction, you must undo the transaction so as to not be penalized, or in the case of an IRA, lose your tax-exempt account.
Can a Self-Directed IRA Invest into a Company I Serve as a Director?
Investing in a company that you are personally involved with may be allowable with Self-Directed IRA funds, however, beware of the IRS rules
What are the Solo 401(k) Rules?
The Solo 401(k) rules must be adhered to in order to maintain your plan and stay IRS compliant so you maintain the freedom to invest in almost anything.
What is a Solo 401(k) Prohibited Transaction?
The Internal Revenue Code (IRC) & ERISA does not describe what a Solo 401(k) Plan 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 qualified retirement plans […]
Self-Directed IRA Disqualified Persons
A Self-Directed IRA allows you to make alternative asset investments with your retirement funds. In other words, it gives you more options than just traditional investments, such as stocks and bonds. However, there are IRS regulations surrounding self-directed IRAs. This includes disqualified persons. As a result, your IRA cannot perform transactions with these people (and […]