Prohibited Transaction Law and Legal Definition

According to 26 USCS § 4975 (c) (1) [Title 26. Internal Revenue Code; Subtitle D. Miscellaneous Excise Taxes; Chapter 43. Qualified Pension, etc., Plans], the term “prohibited transaction” means “any direct or indirect

(A) sale or exchange, or leasing, of any property between a plan and a disqualified person;

(B) lending of money or other extension of credit between a plan and a disqualified person;

(C) furnishing of goods, services, or facilities between a plan and a disqualified person;

(D) transfer to, or use by or for the benefit of, a disqualified person of the income or assets of a plan;

(E) act by a disqualified person who is a fiduciary whereby he deals with the income or assets of a plan in his own interest or for his own account; or

(F) receipt of any consideration for his own personal account by any disqualified person who is a fiduciary from any party dealing with the plan in connection with a transaction involving the income or assets of the plan.”