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What are Examples of Self-Dealing?

August 31, 2014 by John Park Leave a Comment

There are numerous example of what could be considered to be an IRS “self-dealing” Prohibited Transaction.  However, let’s use a few quick examples so you have an idea on “self-dealing” transactions to be aware of:
1)  Self-dealing with a blood-line ascendent or descendent such as your self-directed 401(k) plan purchasing real estate from your father.
2)  Self-dealing with yourself (remember, you are a disqualified individual to your plan) by having your self-directed 401(k) plan purchase an asset from yourself.
3)  Personal use of an asset that your self-directed 401(k) plan already owns.  For example, your self-directed 401(k) plan purchases vacation property in Mexico and you and your family use the property to vacation.
4)  Receiving personal benefit from the self-directed 401(k) plan directly.  For example, your self-directed 401(k) plan owns a property that needs its roof repaired.  You execute the work (e.g., sweat equity) needed to repaid the roof and compensate yourself from the plan for the work performed.

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About John Park

John

As co-founder of Fulcrum Self-Directed, John Park believes in the power of self-directed plans tempered by the individual responsibility to operate the plan in compliance with IRS and DOL regulations. As such, Fulcrum Self-Directed is in a unique position to assist a client in establishing an IRS compliance self-directed plan, while guiding clients with their responsibility to operate and administer their plan.

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