Self directed IRA used to purchase Employer Stock.

[katieinny]

An owner of a company wants to use his self directed IRA to purchase stock in the company he owns. The stock is not publicly traded. I'm worried about the prohibited transaction rules. Does this sound do-able?

[WDIK]

http://benefitslink.com/boards/index.php?s...opic=25992&st=0

[katieinny]

WDIK: I read through the scenario in the link you provided, but that addresses money rolled into a QP and then the plan invests in employer stock. I think there's a PT exemption that allows that as long as every participant has the same investment opportunity.

But I'm not sure that there's a similar exemption that would allow the owner of a company to invest his IRA money in his own company. The phrases "party in interest" and "self dealing" keep coming up in my head.

[Kirk Maldonado]

There is at least one PLR and one DOL opinion dealing with this issue, if you care to do some research.

[WDIK]

katieinny:

Please refer to mbozek's 10:00am post on 9/11/2004 in the thread that I linked to.

(Sorry, I should have linked directly to that post instead of the entire thread.)