All Forum Posts by: Loren Whitney

@Todd Michael

The transaction into your brother/sister's partnership would be acceptable by IRS law but the second transaction across the table from the trust would still be an over the table transaction with an entity managed by a disqualified person.

One consideration that all Individual 401k holders should think about is the idea of plan restatements. If for whatever reason, legislation changes and plan documents need to be revised to stay current or be re-approved, that may come at an added cost if you've purchased a package for a set price.

@Dmitriy Fomichenko

How would you handle that if rules change? Would the plan need to be reapproved by the DOL?

Hey All,

Without mentioning any specific providers, can those of you with self-directed retirement plans share what's important to you?!

List the Top 3 features, benefits, and/or services that are most important when it comes to your plan.

My Top 3 starting with most important would include:

1. Prompt communication and notifications

2. Good technology that allows me to quickly take action and see the results

3. Competitive Fees

Thanks for sharing everyone!

@Matt Devincenzo

=) This used to trip me up too.

Look at the transaction closely though, it would be between Todd's wife and Todd's Mom. From his wife's shoes, a mother-in-law is neither a direct lineal family member or a spouse.

This transcation really only works one direction. I could buy an asset from my in-law but they couldn't buy from me.

I love that one.

If it does turn out to be prohibited, perhaps your spouse (if you're married) has the funds available in an IRA/401k. Your mother would not be disqualified from her shoes.

Your citations are correct but that only represents (E). You should really be paying attention to letters (H) and (I).

First off, sorry for your loss.

I'll offer my thoughts but please clarify this with a tax attorney as my thoughts shouldn't be construed as advice. Also, please let me know what you discover as I'm curious to hear about your findings.

An IRA can conduction business across the table from any entity as long as the entity isn't already 50%+ owned by disqualified person(s). Furthermore, the entity cannot be controlled by a disqualified person.

That being said, I'd have to guess that because the decision making authority surrounding the trust is executed by your mother (a disqualified person), the transaction itself would be prohibited.

Again, run that logic by an attorney to validate it before taking any actions.

Best of luck!

Hey Jd,

You can partner with your IRA funds but the interests of your investments must always remain as an undivided interest. For example, if you buy 1 share of stock in a syndication and it's valued at $100,000. Your IRA could purchase .60 shares and you personally .40 shares. That's assuming the entity will allow such a breakdown to occur.

Furthermore, you need to look at who is involved in the entity. Are you or any other family members personally involved with the entity as investors, employees, or managers?

The IRS publishes a document about prohibited transactions titled section 4975. This document contains a specific sub-section titled 'Disqualfied Persons'. It lists specific individuals but also expands on entity specific disqualifications. A few examples include: 50% or more ownership, holding roles of an officer or director, highly compensated employees, and profits interests. These are examples of possible disqualifications as it relates to the involvement of disqualified persons.

I look forward to helping you out!

I did it! Pro status...

@Marcia Maynard