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?



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?



Trying to find that out; meeting with client tomorrow.



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