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The "A" in IRA stands for "arrangement". As such, IRA holders can yield considerable tax benefits from their self-directed retirement plans, but they must follow IRS rules and regulations in the process. As long as you and your account remain compliant with the Internal Revenue Code, your self-directed IRA can grow unabated.

IRA custodians like New Direction Trust Company exist to help prevent the execution of prohibited transactions. However, with the flexibility of self-direction comes responsibility on the part of account holders. Please help us ensure that your IRA and its self-directed investments maintain IRS compliance. Prohibited transactions may result in the distribution of the applicable assets or the entire account. Any inherent taxes or early distribution penalties will be assessed accordingly.

Disqualified Persons

Disqualified persons and entities include:

  • The account holder (you)
  • The account holder's linear ascendants (parents, grandparents, etc.)
  • The account holder's linear descendants (children, grandchildren, etc.)
  • Spouses of the aforementioned individuals
  • Fiduciaries to the account (accountants, financial advisors, attorneys, etc.)
  • Tax-advantaged savings accounts held by any of the aforementioned individuals
  • Businesses or entities owned or controlled by any of the aforementioned individuals
  • Other individuals or entities may be disqualified as well. Contact New Direction Trust Company for more information

Disqualified persons or entities may not:

  • Purchase, sell, or exchange assets with the account
  • Yield a commission/fee for the purchase, sale, or exchange of assets
  • Rent, occupy, or otherwise use property owned by the account
  • Personally execute renovations/repairs on property owned by the account
  • Retain account earnings on a personal basis
  • Cover account expenses with personal, non-account funds