real estate

[Draper55]

feel like this is a dead horse but it periodically

rears its ugly head with my clients...client

wants to tap retirement plans(db and dc with h&w only participants) for purchase

of second home without incurring distribution taxes.

although i have had clients own real estate in plans

it has never been in personal use real estate. so

in a nutshell, i am of the opinion that even if the plan invests

in a business or businesses that subsequently have ownership in

a property which is for the personal use of a

disqualified person then it would still be a prohibited

transaction because it indirectly benefits the disqualified person.

[Lou S.]

^{Agree. Looks like a textbook PT.}

[Draper55]

after much consternation, the h&w client who had decided

to do two 50k loans in the db and dc plans plus take a big

post 62 in svc db distribution, abruptly changed their minds

and agreed that renting a warm weather second home for

$10k a month for 2-3 mos per year was preferabe to tapping

the q plans with all the tax issues...i good decision i think.