Prohibited Transactions
4 articles
Can I sell assets to my plan?
No. A sale or exchange of property between a retirement plan and a disqualified person is a prohibited transaction under IRC Section 4975(c)(1)(A), regardless of the terms or price involved. !!! Why fair market value doesn't make it legal This is one ...
Can I lend money to or borrow from my plan?
It depends on the plan type and the direction of the loan. Extensions of credit between an IRA and a disqualified person in either direction are always prohibited. A Solo 401(k) is the exception; it allows you to borrow from your own plan under ...
What is sweat equity and why is it prohibited?
Sweat equity refers to performing personal labor or services on assets owned by your retirement plan. It is prohibited because IRC Section 4975(c)(1)(C) bars the furnishing of goods, services, or facilities between a plan and a disqualified person. ...
Can I use plan assets personally?
No. IRC Section 4975(c)(1)(D) prohibits any transfer to, or use by or for the benefit of, a disqualified person of the income or assets of a plan. Personal use of plan-owned assets, in any form, is a prohibited transaction. The rule applies ...