4 ms·

It's still completely legal. These disqualifications only kick in when you own a controlling interest (more than 50%) of an entity. [0]: https://www.irafinanci

by fny 5y ago

It's still completely legal. These disqualifications only kick in when you own a controlling interest (more than 50%) of an entity. [0]: https://www.irafinancialgroup.com/learn-more/self-directed-ira/investing-your-ira-in-a-business-you-work-at/ https://www.irafinancialgroup.com/learn-more/self-directed-i...

runako 5y ago
Keep reading the disqualified persons section: https://news.ycombinator.com/item?id=27621342 https://news.ycombinator.com/item?id=27621342 It specifically sweeps in classes of people with responsibilities that are held by typical active co-founders: "(H) an officer, director (or an individual having powers or responsibilities similar to those of officers or directors), a 10 percent or more shareholder, or a highly compensated employee (earning 10 percent or more of the yearly wages of an employer) of a person described in subparagraph (C), (D), (E), or (G)" Very difficult to a) be a cofounder with meaningful equity b) not do any work so this provision doesn't trigger c) keep your equity and d) have it be worth anything.
- jklein11 5y ago
  Oh that is interesting. This must get very complicated for officers or directors of companies in the S&P 500. Could you not buy index funds that hold shares of the company you work for?
  - runako 5y ago
    They probably just have to buy the shares in taxable accounts. Edit: misread this. I would be surprised if index/mutual funds are subject to the same rules because holders of an index fund don't own shares in any of the underlying securities.
    - jklein11 5y ago
      But then what do they hold in their tax advantaged accounts? Can they not invest in index funds there?
      - nrmitchi 5y ago
        I have to assume you're just feigning naivete here. First, officers or directors of S&P500 companies are almost definitely above the income level to open a new Roth IRA. Second, you're really grasping at straws here trying to trace a relatively minuscule investment through mutual fund in order to defend Thiel here. Someone is saying "Bank robbers are bad because they steal other people's money" and you're sitting over here saying "Well technically when I pick up a penny on the ground, it's not mine. So it's basically the same thing. We have to find a solution that solves both problems at the same time".
        fshbbdssbbgdd 5y ago
        > First, officers or directors of S&P500 companies are almost definitely above the income level to open a new Roth IRA. Backdoor Roth method allows people of any income level to put money in a Roth IRA. I don’t think there’s any income limit to open the account.
        jklein11 5y ago
        I think you are reading into my post too much. I am trying to wrap my head around these rules regarding IRA transactions. I’m certainly not trying to defend Thiel here. Would you mind pointing me to what in my comment lead you to that conclusion? Also I would be shocked if there aren’t directors at publicly traded companies making under 208,000 and are filing jointly in a single income household.

by fny 5y ago

runako 5y ago

Keep reading the disqualified persons section: https://news.ycombinator.com/item?id=27621342 https://news.ycombinator.com/item?id=27621342 It specifically sweeps in classes of people with responsibilities that are held by typical active co-founders: "(H) an officer, director (or an individual having powers or responsibilities similar to those of officers or directors), a 10 percent or more shareholder, or a highly compensated employee (earning 10 percent or more of the yearly wages of an employer) of a person described in subparagraph (C), (D), (E), or (G)" Very difficult to a) be a cofounder with meaningful equity b) not do any work so this provision doesn't trigger c) keep your equity and d) have it be worth anything.

jklein11 5y ago
Oh that is interesting. This must get very complicated for officers or directors of companies in the S&P 500. Could you not buy index funds that hold shares of the company you work for?
- runako 5y ago
  They probably just have to buy the shares in taxable accounts. Edit: misread this. I would be surprised if index/mutual funds are subject to the same rules because holders of an index fund don't own shares in any of the underlying securities.
  - jklein11 5y ago
    But then what do they hold in their tax advantaged accounts? Can they not invest in index funds there?
    - nrmitchi 5y ago
      I have to assume you're just feigning naivete here. First, officers or directors of S&P500 companies are almost definitely above the income level to open a new Roth IRA. Second, you're really grasping at straws here trying to trace a relatively minuscule investment through mutual fund in order to defend Thiel here. Someone is saying "Bank robbers are bad because they steal other people's money" and you're sitting over here saying "Well technically when I pick up a penny on the ground, it's not mine. So it's basically the same thing. We have to find a solution that solves both problems at the same time".
      - fshbbdssbbgdd 5y ago
        > First, officers or directors of S&P500 companies are almost definitely above the income level to open a new Roth IRA. Backdoor Roth method allows people of any income level to put money in a Roth IRA. I don’t think there’s any income limit to open the account.
      - jklein11 5y ago
        I think you are reading into my post too much. I am trying to wrap my head around these rules regarding IRA transactions. I’m certainly not trying to defend Thiel here. Would you mind pointing me to what in my comment lead you to that conclusion? Also I would be shocked if there aren’t directors at publicly traded companies making under 208,000 and are filing jointly in a single income household.