Prohibited transaction for a plan to purchase property from a trust fo

[k man]

Is it a prohibited transaction for a plan to purchase property from a trust for cash where the grantor of the trust is the spouse of the plans trustee?

I know it is a prohibited transaction for the plan to purchanse real estate from a party in interest/disqualified person (spouse). However, I am thinking that if the spouse is merely a grantor of the trust, whether or not there was a PT might depend on whether the beneficiaries of the trust are actually disqualified persons.

[BeckyMiller]

I suggest that you draw a picture of the relationships. I have not done this, but IRC Section 4975 always makes me nervous as it frequently refers to IRC Section 267 which has a long list of attribution rules about grantors of trusts and fiduciaries of trusts, etc.

[Bill Berke]

I agree that you must draw a picture and then look at the law. But I have a rule of thumb - if the proposed transaction makes me think of PT rules, then transaction is probably a PT. And if you aren't sure, get a lawyer involved because this determination is definitely the practice of law. You must be correct, and never wrong in this area if you are not a lawyer.