Prohibited Transaction Rules, Part III: Disqualified Entities

By Jordan Sheppherd

Disqualified Entities

We at CheckBook IRA want to wish all of you a very Happy Thanksgiving and hoping that you surround yourself with family or loved ones. This is the time of year when we take stock in our investment performance and pat ourselves on the back or give ourselves a kick in the pants.

Retirement accounts are becoming a major source of security for our financial future and because of this more people want to take as much control as possible over these accounts. That is where we come in. You have as much control as you want, but you can enlist the help of a professional advisor whenever you so desire.

I asked one of our very successful affiliates what they tell their clients to help them secure financial security:

  1. Stay true to your goals.If you’re invested for the long term, don’t sell off at the first sign of a downturn—maybe that’s the time to invest more.
  1. Realize what is fake news and what is real news.Too often, people read articles on the Internet written by fear mongers who have sold an investment short and are trying to drive price down. In other words, vet your source or sources of information.
  1. Invest in what you know.If you’re going to invest in Bitcoin, become a student of cryptocurrency. Don’t be afraid to look at your past career to see how you can invest in your expertise.
  1. Don’t be afraid to use a financial advisor.Good advisers relish the thought of their clients using checkbook-controlled retirement accounts, for it leads to all kinds of alternative investments and helps them show their value to the client. They can also help shuffle through the fake news and suspect investments.
  1. Invest with a worst-case scenario – WHAT IS THE WORST THAT CAN HAPPEN.That is one of the reasons I like real estate, for if everything goes into a kerfuffle, I always will have some place to live in or a income producing rental. I have enough stock certificates that are only good for starting a campfire.

We don’t invest to lose money, but to build our financial future and the best way to do that is to have a complete plan. Remember that the greater reward the greater risk.

All in all, the above are a few nuggets that I hope you can use.

Finally, we would like to wish you and your family a very joyous and profitable holiday season.


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  1. Ryan

    Was thinking of setting up a checkbook Ira LLC with a portion of my retirement funds. If I later wanted to move more funds into the LLC, would I be able to transfer to the existing LLC or would I need to set up a new one?

    • Jordan Sheppherd

      Hi Ryan,

      You would be able to move additional funds to the existing LLC.

  2. Joe Monaco

    Dear Jordan,

    I understand that the US Department of Labor has declared Prohibited Transaction Exemptions (PTE) in specific circumstances.

    My sole employer is a C-corp for which I am the 100% stock owner with zero revenue, currently. We are redoing our business model from the ground-up and need capital for development, including an e-commerce website. Is there a procedure or systematic way I can get a DOL Prohibited Transaction Exemption so I can free-up IRA-LLC capital for the new version of the C corporation? Is ther another way I might look at this?

    Thank you,

    • Jordan Sheppherd

      Hi Joe,

      There is a possibility such an exemption would be given by the DOL, although it can be a bit involved. Why don’t you call me, or email me privately and I’ll see what I can do. We don’t handle exemptions in-house, but I can put you in touch with someone who does.