Mark Kohler explains which people can't work with your self-directed IRA real estate deals. You, your spouse, kids, and parents are prohibited parties. The IRS won't let them be your realtor or property manager because it treats any benefit to family as self-dealing.
You can't benefit from these transactions or the property. You can't be the realtor on that acquisition. Your spouse cannot be the realtor, your kids cannot be the realtor, your parents cannot be the realtor. And that goes for being the property manager. These are called prohibited parties. And this is the biggest concept to understand these parties. You, your spouse, your kids, their spouses or your parents and their spouse. Those are prohibited parties. Frankly, the IRS doesn't trust you. They're going to say, hey, if you are benefiting any of these people, then you're taking advantage of your ira and it wasn't built for that. Brothers and sisters are different. Third parties are different. If your IRA wants to buy a property and then hire me to be the realtor or the property manager, fine. But you can't hire your spouse to do it because you might pay them too much. You might also have them do it for free, which then benefits your IRA unjustly.
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