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Full Version: IRA as sole shareholder of an S Corporation

BenefitsLink Message Boards > Retirement Plans > IRAs and Roth IRAs

SCUDDESLER

Apr 4 2002, 02:11 PM

Suppose an individual has funds in an IRA and wants to start a new business. The individual directs the Trustee to use the IRA assets to capitalize an S Corporation (the IRA is the sole shareholder). Three questions:

1. May an IRA hold S Corporation Stock?

2. If so, is the S Corporation's income UBTI?

3. Are there any prohibited transaction issues?

mbozek

Apr 4 2002, 04:44 PM

IRA is prohibited from investing in S corp stock- Rev. Rul 92-73.

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