Prohibited transactions

[Guest lskin]

I need to have an explanation in layman's terms as to related party transactions as it applies to prohibited transactions in qualified plans or IRAs.

Can someone give me some examples of these types of prohibited transactions?

For instance if a client has an IRA and wished to purchase stock from his son's business inside his IRA is he able to do that or would it be considered a prohibited transaction?

And if a client has an IRA and they want to purchase the building that his son uses for his business inside his IRA is this a prohibited transaction?

Any other examples that you could think of to help me would be greatly appreciated.

[Guest lskin]

Does anyone want to take this one?

[namealreadyinuse]

There are too may no-nos to list specifically.

I would go to one of the custodian's websites (Pensco, Sterling, etc.) and use some of the general disclaimers there about party in interest transactions. It will be more general, but that probably better illustrates the breadth of the statues.

[jevd]

See IRS Pub 560 & 590 for their explanation.

IRC sec 4975 is your primary source along with regulations.