Are there any Prohibited Transactions?
Understanding prohibited transactions is very critical. The IRS definition of a prohibited transaction is as follows: Generally a prohibited transaction is any improper use of your IRA account or annuity by you, your beneficiary or any disqualified person. Disqualified persons include your fiduciary and members or your family (spouse, ancestor, linear descendant, and any spouse of linear descendant). IRS Publication 590. Strangely, though your brothers and sisters are not in this group of prohibited persons. In IRC 4975 are the rules on prohibited transactions. Prohibited transactions generally involve one of the following: (1) doing business with a disqualified person; (2) benefiting someone other than the IRA; (3) loaning money to a disqualified person; or (4) investing in a prohibited investment. For all of these rules there are some important exceptions if properly structured. Your IRA is a different legal entity, established for your benefit when you reach age 59-1/2 or in certain
