PT avoidance for sale of land

[Young Curmudgeon]

To avoid a prohibited transaction, is there any official (or semi-official) guidance on the amount of time that must pass between the sale of an asset to a third party (B) from an individual (A) and then the sale of that asset to the individual (A)'s retirement plan?

[ETA Consulting LLC]

Not really, as this is a facts and circumstances issue. For instance, if I want to sell the land I own to my retirement plan, but am precluded in doing so because of the prohibited transaction rules, I may decide to sell my land to a friend with the understanding that my retirement plan will purchase the land from him. Under relevant facts and circumstances, the IRS could argue that the arrangment from the onset for my friend to sell the land to my retirement plan constitutes a transaction that is structured to circumvent the prohibited transaction rules.

So, there's really no such time frame. Such time from would really imply a type of safe harbor when there is none.

Good Luck!

[rcline46]

Of course, land in a plan is usually a VERY BAD choice for lots of reasons. Read prior threads on this issue and make sure your client understands the very real issues. Your client may nave good intentions, but remember the road to h e double hocky sticks is paved with good intentions, and that is where 99% of plans with real estate in them end up.

[ETA Consulting LLC]

h e double hocky sticks

h e L L

Okay, I get it