What are some types and examples of prohibited transactions and/or self-dealing transactions?
• Self dealing with a family member (your self directed IRA purchases a home from your mother) • Self dealing with yourself (you self directed IRA purchases a home from yourself) • Personal use of a self directed IRA property (buying a vacation home with self directed IRA money and then staying in the home when on vacation) • Receiving personal benefit from your IRA (paying yourself for work that you do on the property such a repairing the roof) What is an exemption? Exemptions are permission to invest in something or in some way that is technically a prohibited transaction. For example, it is a prohibited transaction to rent property owned by your self directed IRA to your child. An exemption would allow you to do so. What is a UBIT? Unrelated Business Tax Income applies to debt financed property in self directed IRAs and also applies to operating income received from companies owned by IRAs and qualified plans. Typically the tax is owed on the income from the property in the same per
