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Sure, $0.001 is the value on paper (and under current law). The point is, it's exploitable (let's say I'm an Apple engineer, I start a new company and get a win
by machinebun 5y ago
Sure, $0.001 is the value on paper (and under current law). The point is, it's exploitable (let's say I'm an Apple engineer, I start a new company and get a wink wink from some friends in high places who want to invest in my company doing X. I put in my founders stock into IRA in return for first dibs on placement for the investor - 1 year later company has valuation, my stock has risen many %%. Sure, I'm technically doing everything legally, but practically it's somewhat equivalent to insider trading + avoids taxes).
I would personally ban non-public investments in Roth IRAs. That way a debate about market value doesn't have to happen.
- NonEUCitizen 5y agoMany times, $0.001 turns out to be too high a value for startup shares -- a lot of startup shares end up being worth zero.
- s1artibartfast 5y agoseems like the far better solution is banning IRA investments in your own company. This is the current law. If you make a smart or lucky in somebody else's company, bitcoin, or whatever, it isn't an exploit, it is the point.