What is "self-dealing"?

Self-dealing is when your self-directed retirement account makes a prohibited transaction with the same person who owns it (you). You must keep your investments "at arm's length".

Your Self-Directed IRA should benefit from investments and transactions. You should not.

You are a disqualified person. Just like other disqualified persons, you should not be transacting or forming a conflict of interest between yourself and your IRA. Think of assets in your name and your IRA's name as two different parties.

What are some common self-dealing problem examples?

  • Commingling funds from your personal account and your IRA

  • Transferring/selling assets to or from a disqualified person (you) and the IRA, so that you move a taxable investment into your IRA, or one of your IRA investments to your personal taxable accounts.

  • Owning stock or a house in your name and then selling it to your IRA

  • Transacting with a company with your IRA in which you own 50%+ of or hold a key leadership position

  • Paying yourself from your IRA, whether in the form of salary, commissions or discounting/increasing costs other areas of a transaction because of your work

  • Utilizing your own IRA's investment for benefit and pleasure, such as staying in your IRA's investment real estate for vacation, buying raw land from your IRA, or building a cabin and hunting ground.

  • Putting your personal name on the final paperwork of investments, instead of signing as your IRA LLC manager.