Problematic Self-Directed Retirement Activities Series - Session 4: Problematic Self-Directed Retirement Plan Activities

In the first lecture of this four-lecture retirement plan tax law series, Retirement Plan Management and Investment Risk Diversification Standards, we learned the retirement plan (self-dealing activity, incidental benefit) bright line was quantified and defined by public policy’s management and investment risk diversification standards. Such retirement plan risk diversification policy compliance results in transforming generally proscribed Sections 4975(c)(1)(D), (E), or (F) prohibited transaction self-dealing activities into incidental benefits. In the third lecture of this four-lecture retirement plan tax law series, Prohibited Transaction Chinese Walls, we learned eviscerating the self-dealing activity nexus plan asset element by and through properly invoking plan asset rule exceptions enables transforming specifically proscribed Sections 4975(c)(1)(A), (B), or (C) prohibited transaction self-dealing activities into incidental benefits. This lecture applies those retirement plan tax law fundamental concepts in teaching problematic self-directed retirement plan activities. Problematic activities currently pervasive across the nation generally include retirement plan management and investment risk diversification policy noncompliance, the lack of properly using Prohibited Transaction Chinese Walls, and specifically include the use of disqualified person entity Checkbook LLCs, self-directed retirement plan indirect operating company investments, unremunerated account holder non-administrative services, and unreported real estate dealer activity Section 512 unrelated business taxable income.

**Please Note:  If you need credit reported to the IRS for this IRS approved program, please download the IRS CE request form on the Course Materials Tab and submit to leighanne.conroy@acpen.com.

Basic Course Information

*Understanding the history of substantial economic effect policy evolution

*Understanding Going Concern and Liquidation Capital Account Maintenance (Per Capita: Balances: Ratios) method transitivity

*Understanding economic effect trinity’s elements: capital account maintenance, liquidation in accordance with capital account balances, and final capital account deficit restoration

*Understanding Economic Effect Equivalence

*Understanding the simplicity of substantiality’s conclusive presumption

*Understanding necessary partnership agreement special allocation substantial economic effect provisions

*Understanding a substantial economic effect financial forecast should be created at the time originating and offsetting allocations are included in the partnership agreement to show there is a reasonable possibility the allocation will affect substantially the dollar amounts to be received by the partners of the partnership, independent of tax consequences

*Partnership Special Allocations: History, Background, and Policy

*(Per Capita: Balances: Ratios) Capital Account Accounting Method Transitivity

*Economic Effect Trinity, including Economic Effect Equivalence

*The Simplicity of Substantiality’s Conclusive Presumption

*Simple Partnership Agreement Special Allocation Substantial Economic Effect Provisions

*Spreadsheet Going Concern and Liquidation Special Allocation Substantial Economic Effect Reasonable Possibility Analysis