Roth IRA purchasing minority interest in closely held corp.

[Guest 54GRANDAD]

cuhouston@houston.rr.comI own 85% of a closely held corporation. The company recently repurchased the other shareholder's stock (15%). The seller was not a related party. Can my Roth IRA purchase these shares from the company at the same price the company paid for them? Would it have been okay (better) if the seller had sold them directly to my Roth IRA?

[Guest Kevin Wiggins]

You might want to consider whether this would be a prohibited transaction. Talk to your ROTH IRA custodian. Depending on the facts, you might be able to get an exemption from the Department of Labor.

[mbozek]

Many custodians will not accept non publicly held co. as IRA assets. Most of those that accept privately held co as assets require that IRA owner waive liability of custodian from PT violations and charge higher fees. Also custodians are prohibited from giving legal or tax advice to customers. IRA owner needs to talk to a tax advisor who knows PT rules. PT exemptions cost money, e.g., lawyer fees, which make this an unlikely option.