51–60 of 74 posts
This opens up some excellent tax avoidance strategies. I'm assuming this is available also for IRA and Roth IRA. What you do is setup two transactions: One that will lose money in the IRA, and the other that will gain in the Roth IRA. (A straddle.) Make sure you execute both at the same time (if it's a thinly traded security you can end up trading with yourself, but that's not necessary). Then sell, and do it again.…
Can we now subject large "private" firms to the same scrutiny that "public" have to obey? I always thought it was ridiculous that you could call a trillion dollar company with millions of shareholder, "private." From the sounds of it, this ruling handwaves away the inherent risk of investing in a company whose finances you have no visibility into by claiming that putting it into a diversified private fund is the same…
Private firms with more than $10 million in assets and more than 2000 investors (excluding employees) are already subjected to the same scrutiny as public firms have to obey. (The complication here, of course, is that a retirement fund may be a single investor for legal purposes even if it's managing many people's assets.)
I don't think employees are excluded from this.
Earlier quoted context omitted.
Think about what it means to buy into an index fund. When my next paycheck comes in, I'm going to use 20% of it to invest in the stock of some S&P 500 companies, even though I don't know most of their names and have no idea what results can be expected from them. Tossing money blindly at random companies isn't completely unproductive, since capital is valuable, but in terms of the underlying social purposes of invest…
Index investors are not really tossing money blindly. They are investing in a diversified portfolio and then constantly re-weighting their investment by market cap. The alternative to that, before the rise and acceptance of index investing, was people using their 401k money to buy individual stocks. But we all know that your standard mom and pop investor is not going to have time to cut through the bullshit and effec…
Average people should be able to grow their wealth over time without throwing money into inefficient instruments.
Can someone set up a "professionally managed fund" where you can set up an LLC, have the fund invest your 401k in that LLC, pay yourself a salary equal to the amount invested? Bypassing early withdrawal fees for some nominal fee?
No point. There's far easier ways to withdraw tax-deferred money before full retirement age without penalties. Waiting 5 years after a Roth conversion or a 72(t) election are far easier. There's also self-dealing restrictions on IRAs and presumably self-directed 401(k)s as well. Besides which, if you're fucking with the IRS, there's far better things to do than merely avoid a 10% early withdrawal penalty. Eg - have y…
Didnt Mitt Romney shield a fortune from taxes by wrapping Bain Inc deals inside IRAs? Sounds kind of similar.
Didnt Mitt Romney shield a fortune from taxes by wrapping Bain Inc deals inside IRAs? Sounds kind of similar.
IRA withdrawals are taxable at income rates: 37% for that kind of jack. He's delaying rather avoiding. If he was really smart, he'd have done this outside of a retirement account and paid the 20% capital gains rate.
I'd buy SpaceX stock, if Elon would allow.
Google owns a 7.5% stake so you can get exposure that way
Investing $100 into Google to put 29 cents on SpaceX doesn't seem efficient. SpaceX could double in value, and the effect on the Google stock price would still be indistinguishable from noise.
Earlier quoted context omitted.
IRA withdrawals are taxable at income rates: 37% for that kind of jack. He's delaying rather avoiding. If he was really smart, he'd have done this outside of a retirement account and paid the 20% capital gains rate.
He did it in a Roth IRA.
"At the time, Mr. Romney was not able to use a Roth IRA to make these investments because his income tax bracket exceeded the allowable threshold."
Earlier quoted context omitted.
I suspect you phrased this poorly: 1. I set up an LLC. 2. I have a regular job which is earning me income. 3. I put some of that income into a 401K. 4. I direct the 401K to invest in my LLC. 5. As the guy running the LLC, I take that amount of money and pay myself a salary equivalent to what I put in. How is that money ever going to grow? What's the benefit? You didn't pay taxes? Pretty weak benefit, IMO. There is su…
I did word it poorly, and you captured what I was trying to get at (thanks). The benefit is for people that need to withdraw from their 401k before retirement without getting hit with the interest/fees. I guess another part of the benefit is if you want to take advantage of employer match but you don't want to invest in your 401k. I didn't know about self directed retirement. I'll have to go do some research.