Avoiding Self Dealing in IRA Transactions

Another fun case study for you today. This one focuses on the idea of self dealing in an IRA investment. Self Dealing is considered prohibited in IRA investments and is defined as doing an investment with Grandparents, Parents, Spouse, Children and Children's Spouse. All other parties are not considered self dealing. With that in mind here is a fun and real world example we just completed.

Meet Mr and Mrs Collins. A husband and wife investing team that wants to do an IRA investment but understand the rule of self dealing. They found a great investment (with Customer First Homes, a little self publicity) and wanted to do the investment without violating the self dealing rule. They as astute investors always talk investments with their friends and share investment passions with Mr and Mrs Freeland who as it turns out is also interested in the same investment model that the Collins family is interested in. Here is where they correctly make an investment. Mr Collins and Mr. Freeland decide they are going to partner on an investment together. Mrs. Collins and Mrs. Freeland are going to do the same, in another investment of the same dollar amount. They are partnering on investments on not violating the self dealing rule.

Take a look at that example. It is so exciting. Two families, two investments, and essentially both husband and wife teams are sharing in an investment, just not the same investment. Pretty cool!!