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This worked because he used a self directed IRA that most likely invested in some LLC with a marginal amount. It's very probable he also invested in the same co

This worked because he used a self directed IRA that most likely invested in some LLC with a marginal amount. It's very probable he also invested in the same company via some other investment vehicle, possibly direct ownership. The managing members simply assigned more benefits to the self directed IRA instead of the other account... What does not seem fair is that most people think you can only invest in stocks and bonds in an IRA. You go to a bank or brokerage to open an IRA account... They offer you mutual funds, etfs, stocks, bonds... not much else... No one ever tells you that you can do this a different way and invest in different ways... Why? It's just too complicated for most people... https://trustprovident.com/self-directed-investing-in-a-limited-liability-company-or-limited-partnership-with-qualified-funds/ https://trustprovident.com/self-directed-investing-in-a-limi... Yes it does suck for the rest of us but if you have money you have good advisors that can construct this IRA and all of its transactions in a legitimate manner.

erentz 5y ago
What really sucks is I never got the opportunity to invest in PYPL at $0.001 per share. That’s the part that actually confused me. Sure its pre-IPO, but I’ve never seen any that are pricing their shares that low in the beginning, did I miss something?
- erik998 5y ago
  oh yes the par value of stock... https://www.nolo.com/legal-encyclopedia/what-is-par-value-stock.html https://www.nolo.com/legal-encyclopedia/what-is-par-value-st... I think he went the route of his IRA's investment llc membership units being assigned a super large assignment of income distribution vs his initial investment. just guessing...
  - erentz 5y ago
    I’m still not really following, what are you saying about assigning income distribution? But so the way the article made it sound then is his IRA paid for the shares at par value ($1700 = 1700000 shares IIRC). Even though they were of course worth more than par value, so then he owes money to the company for the difference but if that wasn’t paid out of the IRA that would seem an incredible and surely illegal tax dodge so I don’t think that could be the case.
    - erik998 5y ago
      my bad you are correct, https://sdirahandbook.com/self-directed-ira-investing/fund-start-self-directed-ira-investors/ https://sdirahandbook.com/self-directed-ira-investing/fund-s... it is in section: Need to Know #1: Prohibited Transactions
erik998 5y ago
https://sdirahandbook.com/self-directed-ira-investing/fund-start-self-directed-ira-investors/ https://sdirahandbook.com/self-directed-ira-investing/fund-s... looks ok

erentz 5y ago

What really sucks is I never got the opportunity to invest in PYPL at $0.001 per share. That’s the part that actually confused me. Sure its pre-IPO, but I’ve never seen any that are pricing their shares that low in the beginning, did I miss something?

erik998 5y ago
oh yes the par value of stock... https://www.nolo.com/legal-encyclopedia/what-is-par-value-stock.html https://www.nolo.com/legal-encyclopedia/what-is-par-value-st... I think he went the route of his IRA's investment llc membership units being assigned a super large assignment of income distribution vs his initial investment. just guessing...
- erentz 5y ago
  I’m still not really following, what are you saying about assigning income distribution? But so the way the article made it sound then is his IRA paid for the shares at par value ($1700 = 1700000 shares IIRC). Even though they were of course worth more than par value, so then he owes money to the company for the difference but if that wasn’t paid out of the IRA that would seem an incredible and surely illegal tax dodge so I don’t think that could be the case.
  - erik998 5y ago
    my bad you are correct, https://sdirahandbook.com/self-directed-ira-investing/fund-start-self-directed-ira-investors/ https://sdirahandbook.com/self-directed-ira-investing/fund-s... it is in section: Need to Know #1: Prohibited Transactions

erik998 5y ago

https://sdirahandbook.com/self-directed-ira-investing/fund-start-self-directed-ira-investors/ https://sdirahandbook.com/self-directed-ira-investing/fund-s... looks ok