What is Self Dealing?

Understand the Self Dealing Rules

Section 4975 of the IRC, states that you cannot BUY, SELL, or LEASE from a “disqualified person” and breaking this rule is known as Self Dealing.

 First let’s look at who is a Disqualified Person:

• The IRA holder and his or her spouse
• The IRA holder's lineal descendants, ascendants and their spouses
• Investment advisers and managers
• Any corporation, partnership, trust, or estate in which the IRA holder has a 50 percent or greater interest
• Anyone providing services to the IRA, such as the trustee or custodian

Also with certain types of retirement accounts like Simplified Employee Pension (SEP) and SIMPLE IRAs, other people or entities can be considered Disqualified Person.

• The Employer that set up the plan;
• 50% or more owner of the Employer;
• Officers, directors, 10% or more shareholders, and highly compensated employees of the Employer;
• An entity 50% or more owned by the Employer;
• 10% or more partner or joint venturer of the Employer.

The definition of Disqualified Person under the IRC does not include brothers and sisters, aunts, uncles and cousins of the IRA owner