ANTHONY DAVIDE
v.
AD CAPITAL COLLECTIONS, LLC
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An IRA loses its exemption from creditor claims under Florida Statutes § 222.21(2)(a) when the account holder engages in prohibited transactions as defined in 26 U.S.C. § 4975(c) that benefit disqualified persons, causing the account to cease being an individual retirement account under 26 U.S.C. § 408(e)(2)(A).
[1] An individual retirement account loses its exemption from creditor claims under Florida Statutes § 222.21(2)(a) when the account holder engages in prohibited transactions as defined in 26 U.S.C. …
[2] A subsequent individual retirement account funded with proceeds from a first IRA that lost its exempt status due to prohibited transactions similarly loses its creditor-p…
Previewing 2 of 2 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.
Join FLexlaw to unlock all legal intelligence“IRA owners run afoul of § 4975 when they attempt to circumvent taxes or otherwise engage in some form of self-dealing, whether through a direct or indirect transfer.”
Court cited In re Moore, 640 B.R. 397, 406 (Bankr. S.D. Ohio 2022) to support the principle that prohibited transactions under the Internal Revenue Code can result in loss of IRA protection.
Anthony Davide engaged in prohibited transactions in 2016 involving his self-directed IRA that benefited disqualified persons (his wife and children),…
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Third District Court of Appeal State of Florida
Opinion filed May 7, 2025. Not final until disposition of timely filed motion for rehearing.
Nos. 3D23-0595; 3D23-1463; 3D24-0667 & 3D24-1531 Lower Tribunal No. 12-32510
Anthony Davide, Appellant,
vs.
AD Capital Collections, LLC, Appellee.
Appeals from the Circuit Court for Miami-Dade County, Carlos Guzman and Mavel Ruiz, Judges.
Moreno Perdomo, PLLC, and Gino Moreno and Arlenys Perdomo, for appellant.
Sequor Law P.A., and Gregory S. Grossman and Jennifer Mosquera, for appellee.
Before LOGUE, C.J., and SCALES and LOBREE, JJ.
LOGUE, C.J.
Anthony Davide appeals, among other things, the final summary judgments of garnishment entered against two of his self-directed individual retirement accounts. As to the first account, the trial court found that Davide engaged in prohibited transactions in 2016, as defined in 26 U.S.C. § 4975(c) of the Internal Revenue Code, that benefited “disqualified persons” as defined in 26 U.S.C. § 4975(e)(2), namely Davide's wife and children. As a result, Davide's IRA “cease[d] to be an individual retirement account as of the first day of such taxable year.” 26 U.S.C. § 408(e)(2)(A). Therefore, in 2016, due to the "prohibited transactions,” this account lost its exemption from creditor claims afforded by section 222.21(2)(a), Florida Statutes. As to Davide's second account, the trial court found Davide funded the second account with funds from the first account after the first account lost its exempt status in 2016, and therefore, the second account also lost its exempt status.
We have carefully reviewed the arguments raised by Davide and find no error warranting reversal. See In re Moore, 640 B.R. 397, 406 (Bankr. S.D. Ohio 2022) (“IRA owners run afoul of § 4975 when they attempt to circumvent taxes or otherwise engage in some form of self-dealing, whether through a direct or indirect transfer.").
Affirmed.
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