James H. Swanson and Josephine A. Swanson - Page 20

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               As stated previously, respondent based her determination of            
          prohibited transactions on section 4975(c)(1)(A) and (E).                   
          Section 4975(c)(1)(A) defines a prohibited transaction as                   
          including any "sale or exchange, or leasing, of any property                
          between a plan[11] and a disqualified person".12  Section                   

          11                                                                          
               A "plan" is defined by sec. 4975(e)(1) to encompass an                 
          individual retirement account as described under sec. 408.                  
          12                                                                          
               As applicable to the following discussion, sec. 4975(e)(2)             
          defines a disqualified person as:                                           
                    (A) a fiduciary;                                                  
                              *   *   *   *   *   *   *                               
                    (C) an employer any of whose employees are covered                
               by the plan;                                                           
                    (D) an employee organization, any of whose members                
               are covered by the plan;                                               
                              *   *   *   *   *   *   *                               
                    (G) a corporation, partnership, or trust or estate                
               of which (or in which) 50 percent or more of--                         
                         (i) the combined voting power of all                         
                    classes of stock entitled to vote or the                          
                    total value of shares of all classes of stock                     
                    of such corporation,                                              
                         (ii) the capital interest or profits                         
                    interest of such partnership, or                                  
                         (iii) the beneficial interest of such                        
                    trust or estate, is owned directly or                             
                    indirectly, or held by persons described in                       
                    subparagraph (A), (B), (C), (D), or (E);                          
                              *   *   *   *   *   *   *                               
                    (H) an officer, director (or an individual having                 
                                                             (continued...)           




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