What exactly is a prohibited transaction?

Self directed IRA transactions must be for the exclusive benefit of the retirement plan and must not directly or indirectly benefit the IRA owner, or other “unqualified” people. Here are some self directed IRA rules and guidelines to follow: You may not make loans to unqualified individuals, extend credit to your IRA, and you may not pledge the assets of your IRA to secure a loan. Your self directed IRA plans may not purchase the home in which you live, it may not rent real estate it owns to your children, and it may not personally guarantee a loan that your IRA uses to finance the purchase of real estate.

There are many self directed IRA rules, guidelines, and prohibited transactions one must be aware of. As a self directed IRA owner you must comply and obey by these stipulations. STC can help you navigate these complex rules and keep your plan in compliance.