What is the difference between a restricted investment and a prohibited transaction?

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Restricted investments constitute what you cannot invest in with a Rocket Dollar account. Prohibited transactions relate to entities in which you cannot invest or do business within your retirement account.

 

IRS law restricts you from investing in or with...

  • Life insurance
  • Collectibles
  • S-Corp stock (the IRS needs to get their taxes!)

 

A prohibited person could include...

  • Yourself, aka self-dealing. You can't double-dip benefit from the investment, only your IRA can!
  • Spouse
  • Children
  • Spouse‚Äôs children
  • Grandchildren
  • Parents and grandparents
  • Companies where your family is the majority owner
  • Leaders of companies your Self-Directed account is the majority owner

 

 

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