Prohibited Transaction???

[Mark Beekman]

I have a self-directed Solo 401k and I was thinking about making a passive investment with a tax-exempt charity. The thing is my father is the chairman of the charity, so I'm not sure if this would be considered a prohibited transaction or not.

Any good CPAs or Solo 401k experts out there who can clear this up?

[Jon Holdman]

Who did you use to set up the Solo 401K? Seems like they should be able to help you. My reading of the IRS FAQ makes it seem like this is OK. I was thinking it was not, but its the opposite of what I was thinking. Certain entities, #7 in their list, are disqualified persons and, per #8, some of their officers are, too. But looks to me like if you're not caught up by #7 you're OK. I think I'd want to speak to someone with some real authority, though.