4 ms·

Again: I have a problem with someone investing in their startup using a government tax-protected shelter, and then making a killing off of it: that is double di

Again: I have a problem with someone investing in their startup using a government tax-protected shelter, and then making a killing off of it: that is double dipping, and scum-baggy. Simple law: you cannot invest in your own company in your own Roth IRA because it is blatantly unfair to other investors who don't have similar insider trading abilities. Done.

cscurmudgeon 5y ago
> Simple law: you cannot invest in your own company in your own Roth IRA because it is blatantly unfair to other investors who don't have similar insider trading abilities. Why can't other investors create their own startups and invest their money similarly? Startup founders take a lot of risk. There is a big chance his investment could have been zero. It is strange that ProPublica does not understand this basic concept. Where is their report on millions of Roth accounts that went to zero?
- SavantIdiot 5y ago
  > It is strange ProPublica not understand this basic concept. One could ask how you demonstrably cannot understand the conflation of two unrelated concepts? Concept A: taking a risk to create a startup that you hope becomes a profitable company by executing to its core competency Concept B: investing in your own company through a tax vagary with an investment device that has nothing to do with startup (or a particular startup) Seems clear as day to me. https://www.youtube.com/watch?v=BPX-wuplDvc https://www.youtube.com/watch?v=BPX-wuplDvc
- diob 5y ago
  The paltry amount he invested was hardly a risk. Had it not panned out, he would have been out basically zilch.
  - cscurmudgeon 5y ago
    He was a founder. His investment was not just financial. When he invested, he was not ultra rich. So a loss would have been significant. Remember, we can't see the future. By your logic: You are free to invest like him in early stage startups. You will be out zilch, so why not do what he did?
    - nrmitchi 5y ago
      > By your logic: You are free to invest like him in early stage startups. You will be out zilch, so why not do what he did? 1. Accredited investor rules 2. Please find me a startup which will allow me to buy shares at $0.001/share while simultaneous selling to other investors at a price of 500k[0]. 3. If you say to start my own and invest in my own company that I am working for in my Roth, I'll remind you that it's explicit not allowed, and the fact that it's not allowed is the thing that most people are taking issue with. [0] Yes, that's not the full valuation issue, but it's enough to see that the value at the time wasn't really legitimate.
    - diob 5y ago
      "With financial support from friends and family, he raised $1 million" - from his wiki. Yeah, I don't think this person was hurting for the paltry sum they invested. It also sounds like they would've been just fine if it had failed (aka just move on to the next venture until you hit jackpot). The rich get richer I guess, and random folks on the internet applaud the pilfering of the commons (dodging taxes).
- sfblah 5y ago
  This isn't a Leetcode puzzle. It's a question of how you want society to be organized. Do you really think it's reasonable to have loopholes that allow certain semi-random people to totally escape the income tax system? What possible good could that do for society?
nrmitchi 5y ago
I mean, you're already not allowed to use a Roth to invest in a company that you're an officer of, major shareholder in, etc (with many other restrictions), so I'm not sure how adding a new law would have changed this (since the existing ones appear to have just been ignored)

cscurmudgeon 5y ago

> Simple law: you cannot invest in your own company in your own Roth IRA because it is blatantly unfair to other investors who don't have similar insider trading abilities. Why can't other investors create their own startups and invest their money similarly? Startup founders take a lot of risk. There is a big chance his investment could have been zero. It is strange that ProPublica does not understand this basic concept. Where is their report on millions of Roth accounts that went to zero?

SavantIdiot 5y ago
> It is strange ProPublica not understand this basic concept. One could ask how you demonstrably cannot understand the conflation of two unrelated concepts? Concept A: taking a risk to create a startup that you hope becomes a profitable company by executing to its core competency Concept B: investing in your own company through a tax vagary with an investment device that has nothing to do with startup (or a particular startup) Seems clear as day to me. https://www.youtube.com/watch?v=BPX-wuplDvc https://www.youtube.com/watch?v=BPX-wuplDvc
diob 5y ago
The paltry amount he invested was hardly a risk. Had it not panned out, he would have been out basically zilch.
- cscurmudgeon 5y ago
  He was a founder. His investment was not just financial. When he invested, he was not ultra rich. So a loss would have been significant. Remember, we can't see the future. By your logic: You are free to invest like him in early stage startups. You will be out zilch, so why not do what he did?
  - nrmitchi 5y ago
    > By your logic: You are free to invest like him in early stage startups. You will be out zilch, so why not do what he did? 1. Accredited investor rules 2. Please find me a startup which will allow me to buy shares at $0.001/share while simultaneous selling to other investors at a price of 500k[0]. 3. If you say to start my own and invest in my own company that I am working for in my Roth, I'll remind you that it's explicit not allowed, and the fact that it's not allowed is the thing that most people are taking issue with. [0] Yes, that's not the full valuation issue, but it's enough to see that the value at the time wasn't really legitimate.
  - diob 5y ago
    "With financial support from friends and family, he raised $1 million" - from his wiki. Yeah, I don't think this person was hurting for the paltry sum they invested. It also sounds like they would've been just fine if it had failed (aka just move on to the next venture until you hit jackpot). The rich get richer I guess, and random folks on the internet applaud the pilfering of the commons (dodging taxes).
sfblah 5y ago
This isn't a Leetcode puzzle. It's a question of how you want society to be organized. Do you really think it's reasonable to have loopholes that allow certain semi-random people to totally escape the income tax system? What possible good could that do for society?

nrmitchi 5y ago

I mean, you're already not allowed to use a Roth to invest in a company that you're an officer of, major shareholder in, etc (with many other restrictions), so I'm not sure how adding a new law would have changed this (since the existing ones appear to have just been ignored)