[phonon]

I don't know if that's a distinction with a difference. The rules are that they don't want you investing in a business you have material control over, as part of your IRA. Maybe it's because they think it's too risky, or can lead to self-dealing abuses...or $5 Billion tax loopholes.

The guidance they give you may be helpful

Department of Labor (DOL) Advisory Opinions suggest that under the following circumstances, a prohibited transaction would likely occur:

The transaction is part of an agreement by which an IRA owner causes IRA assets to be used in a manner designed to benefit the IRA owner (or any person in which the IRA owner has an interest) such that it would affect the exercise of the IRA owner's best judgment as an IRA fiduciary. The IRA owner receives or will receive compensation from the subject company.

By the terms or nature of the transaction, a conflict of interest exists between the IRA and the IRA owner (or persons in which the IRA owner has an interest).

The IRA owner will be relying upon or otherwise be dependent upon the IRA investment in order for the IRA owner (or persons in which the IRA owner has an interest) to undertake or to continue the investment (e.g., minimum investment to be satisfied jointly by the IRA and IRA owner).

https://www.dwt.com/blogs/startup-law-blog/2020/10/startup-i...

https://www.irs.gov/retirement-plans/plan-participant-employ...