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IRA Rules PDF Print E-mail

Following the rules set forth by the IRS will protect against the loss of the tax-deferred status of your account.

What investments cannot be made?

The following comes from IRS Publication 590:

"Prohibited Transactions"

Generally, a prohibited transaction is any improper use of your traditional IRA account or annuity by you, your beneficiary, or any disqualified person.

Disqualified persons include your fiduciary and members of your family (spouse, ancestor, lineal descendant, and any spouse of a lineal descendant).

The following are examples of prohibited transactions with a traditional IRA:

Borrowing money from it.
Selling property to it.
Receiving unreasonable compensation for managing it.
Using it as security for a loan.
Buying property for personal use (present or future) with IRA funds.

IRS Publications

The following is a list of relevant IRS publications regarding IRAs:

Who's Not Disqualified

  • Your brothers and sisters
  • your spouse's brothers and sisters
  • your spouse's parents *
  • your spouse's grandparents
  • your spouse's stepchildren
  • your grandparent's spouse, if not your natural grandparent
  • your aunts, uncles, and cousins

Who's Disqualified

  • you
  • your spouse
  • your parents and/or your adoptive parents
  • your natural grandparents
  • your natural children and/or your adopted children
  • your stepchildren
  • The spouse of your natural children
  • your grandchildren
  • Any fiduciary
  • Any people providing services to your IRA

* 07032014 - May require an attorney opinion letter




Fraud Awareness

Here are some helpful resources:

800 732 0330 The Securities and Exchange Commission (SEC) is dedicated to helping Americans protect their investments.

202 737 0900 The North American Securities Administrators’ Association (NASAA) provides information on investor education.

301 590 6500 The Financial Industry Regulatory Authority (FINRA) has an “Investor” section on Smart Investing.

888 687 2277 American Association of Retired Persons (AARP) includes a section on scams, fraud and consumer protection.