1.2. What is a disqualified person for purposes of the prohibited transaction rules?
Under IRS rules, an IRA owner may not invest in property that he/she, a relative, his/her business, already owns. The following are generally regarded as disqualified persons under the IRS rules:
- The IRA holder or owner,
- The IRA holder’s spouse,
- The IRA owner’s ancestors or lineal descendants,
- Spouses of the IRA holder’s lineal descendants,
- Investment managers and advisors,
- Anyone providing services to the plan (IRA), for example the IRA trustee or custodian,
- Any corporation, partnership, trust, or estate in which the IRA owner has a 50% or greater interest or control
More detailed definitions may be found on the IRS website.