Relevant Internal Revenue Code Links

Below are relevant links regarding impermissible IRA investments and transactions, as well as transactions resulting in taxes, from the Internal Revenue Code and U.S. Treasury.

Section 4975 of the Internal Revenue Code – IRC provision referencing tax on prohibited transactions.

Section 408(a)(3) of the Internal Revenue Code – IRC provision prohibiting IRAs from investing in life insurance contracts.

Section 408(e)(2) of the Internal Revenue Code – IRC provision describing an IRA’s loss of tax-exempt status upon engaging in a prohibited transaction.

Section 408(e)(4) of the Internal Revenue Code – IRC provision describing effect of pledging an IRA or any IRA assets as security for a loan.

Section 408(m) of the Internal Revenue Code – IRC provision describing impermissible investment in collectibles.

U.S. Treasury Regulations Sections 1.408-1(c)(2), (3) and (4) 1.408-2(b)(3) – Treasury Regulations Sections discussing consequences of IRA engaging in prohibited transactions, being pledged as security for a loan, and prohibition on investment in life insurance contracts.