IRA Prohibited Transaction Real Estate Flipping Ruling

Last September, I gave the closing argument in a U.S. Bankruptcy Court case involving an IRA and the prohibited transaction rules.  The IRA owner regularly “flipped” houses through his IRA.  He also made sure work was properly done, hired sales agents and decided what properties would be bought and sold.  He also negotiated sales terms.  The Court ruled that there was no prohibited transaction, largely because there was no transaction between the owner and the IRA.   The case is helpful in that the facts tested the limits of what can be done in terms of currently popular real estate activities.