Common Self-Directed IRA Prohibited Transactions: A Quick List

If you own an IRA account, you've probably read or heard a lot about prohibited transactions. If you haven't, that's okay.

Let's just say you don't want to get caught being involved in one.

This is vital information for anyone who invests with a Self-Directed IRA, so read on.

Direct Prohibited Transactions

The types of transactions that could fall under the prohibited transaction rules can be grouped in three different categories: Direct, Conflict of Interest, and Self-Dealing.

The direct or indirect furnishing of goods, services, or facilities between an IRA and a “disqualified person” can take on many forms. Here are some more examples.

The direct or indirect lending of money or other extension of credit between an IRA and a “disqualified person”.

The direct or indirect transfer to a “disqualified person” of income or assets of an IRA also constitutes a prohibited transaction. In real life, this might look like any of these examples:

Conflict of Interest Prohibited Transactions

A “Conflict of Interest Prohibited Transaction” often involves one of the following:

Self-Dealing Prohibited Transactions

Self-dealing refers to the direct or indirect act by a “Disqualified Person” who is a fiduciary whereby he/she deals with income or assets of the IRA in his/her own interest or for his/her own account.

Hopefully this article helps you, feel free to bookmark it as it sure to prove useful to you in the future if you plan on investing using a Self-Directed IRA.

If you have any questions about investing with a Self-Directed IRA, please contact Royal Legal Solutions today.