What Is a Prohibited Transaction?

Internal Revenue Code Section 4975 defines a prohibited transaction as a transaction between a plan (your account) and a disqualified person. In general, "disqualified persons" are defined to be the account holder, other fiduciaries, certain family members (lineal descendants and spouses of lineal descendants) and businesses under the account holder’s (or disqualified person’s) control.

Please review the Code for specific information and definitions. Other useful resources are Publications 560 and 590.