Instructions For Form 5330 (Rev. 2013) (Page 7 of 13) in pdf

Schedule C. Tax on

partnership, depending on how the

6. Receipt of any consideration for

organization is treated for federal tax

his or her own personal account by any

Prohibited Transactions

purposes.

disqualified person who is a fiduciary

(Section 4975)

from any party dealing with the plan

6. A member of the family of any

connected with a transaction involving

individual described in (1), (2), (3), or

Section 4975. Section 4975 imposes

the income or assets of the plan.

(5). A “member of a family” is the

an excise tax on a disqualified person

spouse, ancestor, lineal descendant,

who engages in a prohibited transaction

Exemptions. See sections 4975(d),

and any spouse of a lineal descendant.

with the plan.

4975(f)(6)(B)(ii), and 4975(f)(6)(B)(iii)

7. A corporation, partnership, or

for specific exemptions to prohibited

Plan. For purposes of this section,

trust or estate of which (or in which) any

transactions. Also see section

the term “plan” means any of the

direct or indirect owner holds 50% or

4975(c)(2) for certain other transactions

following.

more of the interest described in (5a),

or classes of transactions that may

A trust described in section 401(a)

(5b), or (5c) of such entity. For this

become exempt.

that forms part of a plan.

purpose, the beneficial interest of the

A plan described in section 403(a)

Line 1. Check the box that best

trust or estate is owned, directly or

that is exempt from tax under section

characterizes the prohibited transaction

indirectly, or held by persons described

501(a).

for which an excise tax is being paid. A

in (1) through (5).

prohibited transaction is discrete unless

An individual retirement account

8. An officer, director (or an

it is of an ongoing nature. Transactions

described in section 408(a).

individual having powers or

involving the use of money (loans, etc.)

An individual retirement annuity

responsibilities similar to those of

or other property (rent, etc.) are of an

described in section 408(b).

officers or directors), a 10% or more

ongoing nature and will be treated as a

An Archer MSA described in section

shareholder or highly compensated

new prohibited transaction on the first

220(d).

employee (earning 10% or more of the

day of each succeeding tax year or part

A Coverdell education savings

yearly wages of an employer) of a

of a tax year that is within the taxable

account described in section 530.

person described in (3), (4), (5), or (7).

period.

A Health Savings Account described

9. A 10% or more (in capital or

in section 223(d).

Line 2, Column (b). List the date of all

profits) partner or joint venturer of a

A trust described in section

prohibited transactions that took place

person described in (3), (4), (5), or (7).

501(c)(22).

in connection with a particular plan

10. Any disqualified person, as

during the current tax year. Also, list the

If the IRS determined at any

described in (1) through (9) above, who

date of all prohibited transactions that

time that your plan was a plan

is a disqualified person with respect to

took place in prior years unless either

as defined above, it will always

any plan to which a section 501(c)(22)

the transaction was corrected in a prior

CAUTION

remain subject to the excise tax on

trust applies, that is permitted to make

tax year or the section 4975(a) tax was

prohibited transactions under section

payments under section 4223 of the

assessed in the prior tax year. A

4975. This also applies to the tax on

Employee Retirement Income Security

disqualified person who engages in a

minimum funding deficiencies under

Act (ERISA).

prohibited transaction must file a

section 4971.

separate Form 5330 to report the excise

Prohibited transaction. A

tax due under section 4975 for each tax

Disqualified person. A “disqualified

prohibited transaction is any direct or

year.

person” is a person who is any of the

indirect:

following.

Line 2, Columns (d) and (e). The

1. Sale or exchange, or leasing of

“amount involved in a prohibited

1. A fiduciary.

any property between a plan and a

transaction” means the greater of the

disqualified person; or a transfer of real

2. A person providing services to

amount of money and the fair market

or personal property by a disqualified

the plan.

value (FMV) of the other property given,

person to a plan where the property is

3. An employer, any of whose

or the amount of money and the FMV of

subject to a mortgage or similar lien

employees are covered by the plan.

the other property received. However,

placed on the property by the

for services described in sections

4. An employee organization, any of

disqualified person within 10 years prior

whose members are covered by the

4975(d)(2) and (10), the amount

to the transfer, or the property

plan.

involved only applies to excess

transferred is subject to a mortgage or

compensation. For purposes of section

5. A direct or indirect owner of 50%

similar lien which the plan assumes;

4975(a), FMV must be determined as of

or more of:

2. Lending of money or other

the date on which the prohibited

a. The combined voting power of all

extension of credit between a plan and

transaction occurs. If the use of money

classes of stock entitled to vote, or the

a disqualified person;

or other property is involved, the amount

total value of shares of all classes of

3. Furnishing of goods, services, or

involved is the greater of the amount

stock of a corporation;

facilities between a plan and a

paid for the use or the FMV of the use

disqualified person;

b. The capital interest or the profits

for the period for which the money or

interest of a partnership; or

other property is used. In addition,

4. Transfer to, or use by or for the

transactions involving the use of money

benefit of, a disqualified person of

c. The beneficial interest of a trust

or other property will be treated as

income or assets of a plan;

or unincorporated enterprise in (a), (b),

giving rise to a prohibited transaction

or (c), which is an employer or an

5. Act by a disqualified person who

occurring on the date of the actual

employee organization described in (3)

is a fiduciary whereby he or she deals

transaction, plus a new prohibited

or (4) above. A limited liability company

with the income or assets of a plan in his

transaction on the first day of each

should be treated as a corporation or a

or her own interest or account; or

-7-

Instructions For Form 5330 (Rev. 2013) Page 7

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