Prohibited transaction
On the advice of his broker, investment management fees for client’s personal account have been paid from his IRA. Can he avoid the consequences of a prohibited transaction by reporting these personal expenses as taxable distributions? I believe this occurred only in 2015 and will advise him to cease this practice immediately. What other if any, recourse does he have to avoid having the entire IRA disqualified?
Permalink Submitted by Alan - IRA critic on Wed, 2016-03-09 19:33
I suppose if he were to take a distribution for the fee amount, it would show good faith. Does client have any documentation that broker suggested this?
Permalink Submitted by Joseph Wild on Wed, 2016-03-09 19:44
Trying to find that out; meeting with client tomorrow.