Can an IRA loan money to an unrelated corporation and the IRA Owner enter into a consulting agreement with that corporation without a PT?

[Guest BKH]

Can an IRA owner loan funds out of his IRA to an unrelated and independent corporation and at the same time enter into a consulting agreement to perform services to that corporation without incurring a prohibited transaction? Thanks for your help.

[Guest BKH]

As a follow-up, my concern is that since the IRA owner is receiving compensation (and thus a benefit) from the independent company under a consulting agreement, there is a prohibited transaction under Code Section 4975©(1)(D) or (E) because the IRA owner has been benefited or has dealt with the IRA assets in his own interest (i.e., self-dealing). The consulting agreement is a way to provide the IRA owner with a return on the loan that would otherwise be prohibited under the state usurious interest rules. Thanks.

[Guest jfp]

It is certainly a pt based on the facts which you have set forth. If the IRA owner was required to perform actual services for his consulting fee, then you'd still be in a gray area.