Prohibited Transaction Question

[Kathryn Knoblauch]

Hello All,

I am considering a purchasing a property using my SD 401K and would like to use my daughter, who just passed her real estate salesperson's license to represent my 401K so she can earn a commission. She is a disqualified person, however does she come under the following statutory exemption?

Below is a list of some of the statutory exemptions found in Internal Revenue Code Section 4975(d) that apply to Solo 401ks:

Any contract with a disqualified person for office space, legal, accounting or other services necessary for the operation of the Solo 401k Plan as long as reasonable compensation is paid. Note – this exemption does not apply to a Solo 401k Plan fiduciary (the Solo 401k Plan trustee) as per Treasury Regulation Section 54.4975-6(a)(5).

[Dmitriy Fomichenko]

@Kathryn Knoblauch

your daughter is a disqualified person and CAN NOT be an agent in a transaction involving your 401k.