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Subject Author Date
What can a Roth IRA own? Dick Adams 04-20-2008
Posted by Mark Bole on April 21, 2008, 11:23 am
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 Dick Adams wrote:
> Under what conditions can a Roth IRA own an LLC which
> owns equity shares in unlisted companies including S-Corps
> and closely-held corporations?
>
> The person who asked me this question wants to invest in
> small businesses in his community. He also wants to make
> sure he stays as far away from self-dealing as possible.
>
> Can this be done?

Even if it can, why? At a paltry $5k/year, it will take some time to
make a significant investment. Even if it is a conversion from a
Traditional IRA or a change of investment from an existing Roth, is this
really the best retirement vehicle for the individual?

If the investment in local small businesses is a good one, why
needlessly complicated it with the current and potential future
restrictions of a Roth, especially when one knows from the outset that
one is pushing the envelope of the rules for same.

-Mark Bole

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Posted by dpb on April 21, 2008, 2:33 pm
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 Mark Bole wrote:
...
> If the investment in local small businesses is a good one, why
> needlessly complicated it with the current and potential future
> restrictions of a Roth, especially when one knows from the outset that
> one is pushing the envelope of the rules for same.

I would venture to hazard ( :) ) a guess the client is attempting to
make a tax shelter in the hope one or more of these pays off big down
the road?

--

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

Posted by Harlan Lunsford on April 21, 2008, 5:14 pm
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dpb wrote:
> Mark Bole wrote:
> ...
>> If the investment in local small businesses is a good one, why
>> needlessly complicated it with the current and potential future
>> restrictions of a Roth, especially when one knows from the outset that
>> one is pushing the envelope of the rules for same.
>
> I would venture to hazard ( :) ) a guess the client is attempting to
> make a tax shelter in the hope one or more of these pays off big down
> the road?

Hmm, yess... so.... perhaps... this might imply insider trading?
(And yes, I know we're not dealing with publically traded companies.)

ChEAr$,
Harlan

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

Posted by Seth on April 23, 2008, 12:48 pm
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>Mark Bole wrote:
>...
>> If the investment in local small businesses is a good one, why
>> needlessly complicated it with the current and potential future
>> restrictions of a Roth, especially when one knows from the outset that
>> one is pushing the envelope of the rules for same.
>
>I would venture to hazard ( :) ) a guess the client is attempting to
>make a tax shelter in the hope one or more of these pays off big down
>the road?

Or to avoid all the tax complications that come with some types of
investments?

Seth

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

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