Sell of Real Estate

[Archimage]

I have someone who wants to sell their real estate out of their IRA to his brother. I don't see anything under IRC 4975 that says that this is a PT. Am I correct?

[Lame Duck]

In my experience, most of these sales to a brother end up as an indirect transfer back to the owner. I do not know of any express prohibition on a transfer to a brother. Both IRC 4975(e)(6) and ERISA Section 3(15) define "member of family" and relative" as Pouse, ancestor, lineal descendant, and any spouse of a lineal descendant."

[QDROphile]

Dealing with a family member is always touchy because it is a PT for a fiduciary (the IRA owner) to receive anything of benefit other than the proceeds to the account. Especially within families, there are lots of things going on both over and under the table that could be seen as tangible or intangible benefit to the IRA owner outside of the account itself. Among other things, valuation will be suspect.