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No, they also have created legal advantages for their employees that aren't available to most people. E.g. I cannot do any margin trades in my IRA and am subjec
by ummonk 8y ago
No, they also have created legal advantages for their employees that aren't available to most people. E.g. I cannot do any margin trades in my IRA and am subject to settlement rules if I try to do day trading. Additionally, if I founded my own startup I would not be able to invest my Roth IRA money in it and let it grow tax free.
- fdjj4iu5vn 8y agoWhat about self-directed IRAs?
- sokoloff 8y agoVia a self-directed Roth IRA, you probably could invest in your own startup.
- ummonk 8y agoLooked into that back when I was founding a startup - lawyer said it was a no-go due to self-dealing rules.
- gwern 8y agoYour lawyer was wrong, then. If you look around, you'll find coverage of people successfully doing their startup shares in their Roth IRA, and I know one billionaire personally who did that.
- sokoloff 8y agoIt’s a facts and circumstances thing. Yes, it’s possible to do. It’s not possible in some circumstances. (Not possible for S-Corp, not possible if the company will be buying assets [inc IP] from the IRA holder, probably not possible if the company isn’t profitable enough to pay a salary from operations [you can’t work for free for your IRA holding, it’s legally risky to use your IRA to funnel you current salary], etc) GP’s lawyer could very well have been right in advising that GP couldn’t do it under that specific set of facts.
- ummonk 8y ago>probably not possible if the company isn’t profitable enough to pay a salary from operations Yeah, that was definitely the case.
- auntienomen 8y agoThis is precisely what Mitt Romney did with his Bain Capital shares.