3980 / What are prohibited transactions?

Any transaction, whether direct or indirect, between a plan and a disqualified person (see Q 3981) constitutes a prohibited transaction under the IRC. These transactions include:

(1)  a sale, exchange, or lease of any property, including a transfer of property subject to a security interest assumed by the plan or placed on it within 10 years prior to the transfer;¹

(2)  lending of money or other extension of credit;

(3)  furnishing of goods, services, or facilities; and