Below are a list of restricted investments listed in IRC Section 408 (code for IRA’s) and prohibited transactions listed in Section 4975 (prohibited transactions for various retirement accounts). These rules derive from the official version of the Internal Revenue Code (Title 26) made available to the public by Congress at www.uscode.house.gov.
Restricted Investments:
- Life Insurance Contracts
- Collectibles defined as:
- Any work of art
- Any rug or antique
- Any metal or gem
- Any coin or stamp
- Any Alcoholic beverage
(Note: Exceptions for certain coins and bullion)
Prohibited Transactions:
Any direct or indirect…
- Sale or exchange, or leasing, of any property between a plan and a disqualified person;
- Lending of money or other extension of credit between a plan and a disqualified person;
- Furnishing of goods, services, or facilities between a plan and a disqualified person;
- Transfer to, or use by or for the benefit of, a disqualified person of the income or assets of a plan;
- Act by a disqualified person who is a fiduciary whereby he deals with the income or assets of a plan in his own interests or for his own account; or
- Receipt of any consideration for his own personal account by any disqualified person who is a fiduciary from any party dealing with the plan in connection with a transaction involving the income or assets of the plan
Disqualified People:
A disqualified person is the IRA Participant or anyone who is considered to be the IRA Participant. If you are the IRA Participant, the people/entities listed below are disqualified people/entities:
- You
- Your ascendants and descendants (i.e. vertical bloodline, mother/father, daughter/son)
- Your spouse or the spouse of your “descendants”
Note: Spouses of ascendants i.e. stepmother/stepfather and siblings are not disqualified - Fiduciaries to your IRA (i.e. custodian or one who provides services to the IRA)
- Companies owned or controlled 50% or more by the disqualified people listed above
