Tag Archive for ERISA Plan

Self-Directed ERISA Plan Prohibited Transaction Chinese Walls

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Two 2013 United States Tax Court decisions, Peek[1]and Ellis,[2] evince a clear mandate for taxpayers seeking protection from the plan asset look-through rule’s operating company exception: STOP THE CONSTRUCTIVE OWNERSHIP DISQUALIFIED PERSON ENTITY CHAIN!!!!! In Peek, the self-directed Peek IRA and the self-directed Fleck IRA each owned 50% capital equity interest of the fire extinguisher sales operating company. In Ellis, the taxpayer’s self-directed IRA owned 98% of the used car sales operating company.

In both cases, the Tax Court’s holdings distill the proposition operating company section 4975(e)(2)(G) disqualified person status preempts the operating company exception to the plan asset look-through rule.[3] My paper, “Changes in Form 5498 Reporting And Read more