4 ms·
You're not allowed to. Employee stock options are earned income, and you can't assign earned income into an IRA to escape taxation. Before you ask, you're als
by nrmitchi 5y ago
You're not allowed to.
Employee stock options are earned income, and you can't assign earned income into an IRA to escape taxation.
Before you ask, you're also not allowed to sell your stock options to your IRA.
As for how Thiel did it? It was arguably a prohibited transaction at the time and he's likely arguing that the statute of limitations has long past.
- dboreham 5y agoDoes the statute of limitations get you off owing the tax due today as well?
- nrmitchi 5y agoI don't know, but I'm sure the argument is that the initial transaction can't be examined any more, and the subsequent transactions were all perfectly valid. In my opinion, the entire IRA should be considered tainted and have taxes owed on all gains since 1999. There could also be the argument that this constitutes tax fraud (depending on whether or not the $0.001 price was significantly under the market price that investors were offered at the same time), which as far as I know means the statute of limitations doesn't apply.
- abrokenpipe 5y agoThe whole point of a roth IRA is that taxes are paid on the assets before they are added and the investment becomes exempt from capital gains. I'm guessing the law applies to the act of adding the options rather than exercising them, so if he paid income taxes on them and the statue of limitations have passed he is in the clear.
- stevespang 5y agoFraud has no statute of limitations