A prohibited transactionis a transaction involving a self-directed IRA that is not permitted under applicable IRS rules. These rules generally restrict certain transactions between the IRA and disqualified persons, including the account owner and certain family members or related parties.

Examples may include using IRA assets for personal benefit, selling personally owned property to the IRA, borrowing money from the IRA, or conducting certain transactions with other disqualified persons.

Prohibited transactions can result in significant tax consequences and may affect the tax-advantaged status of the IRA. Consult a qualified tax or legal professional if you have questions about a specific transaction.