The Tax Implications of Starting a Business With Retirement Money (2013, state)
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It is a huge mistake to take retirement money IRA/401k money to start a business. The IRS will enforce the rules when it comes to your tax deferred savings. When the rules were put in place it was with the wording that it would not be used to begin a new business as this money was tagged and earmarked just for retirement.
It is a huge mistake to take retirement money IRA/401k money to start a business. The IRS will enforce the rules when it comes to your tax deferred savings. When the rules were put in place it was with the wording that it would not be used to begin a new business as this money was tagged and earmarked just for retirement.
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Very similar to buying Real estate with IRA money.
Legal, and possible to do. Just be sure to know ALL the costs and rules and your EXIT plan. There needs to be a 3rd party 'administrator' (They do not come cheap). It is very popular with franchise brokers such as Frannet. They target ex ceo / managers / folks with (presumably) enough sense & bucks in their acct to make a go of it. Generally they have a pretty high success rate (as compared to independent 'small business' stats > 10% survive 5+ yrs)
Can be great for some situations, but is not cheap or carefree.
Primary rule is DO NOT CO-MINGLE, or ever run out of IRA funds, or you will potentially incur tax due on 100% of 'distribution' (i.e. the entire amount invested from your IRA)
all the benefits of real estate are lost buying it through an ira.
depreciation, and lower capital gains rates don't exist if you buy it through an ira
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