you can invest in a business if you have less than a 49%
ownership in it or a combined 50% ownership between
disqualified individuals. You can have a interest in the
company however. For instance you could invest your ira
money into a business and the ira would own say 10% interest
into that business with a structured deal. if you have any
further questions let me know.

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miscellaneousmedia[at]yahoo.com wrote:
- quote -

Is the business publicly traded or issue bonds? Then you can
direct IRA assets to be invested in it, just don't
"withdraw" from the IRA until you retire.

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Harlan Lunsford wrote:
- quote -

Ok. Thanks. It did sound too good to be true, thus ... But a
small question/follow up. If you invest in a business, does
it mean you can have no material stake in it at all? What if
you are a minority share holder in a privately held company?
What if a trust owned the business?

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miscellaneousmedia[at]yahoo.com wrote:

- quote -

You can buy a first house,
http://www.ourfamilyplace.com/homebuyer/irsfirst.html
or you can use the cash for a short term (30 day) loan, but
that's about it. Otherwise you pay both a penalty *and*
taxes.

What kind of business are you talking about and what
fraction of it is "yours"?

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miscellaneousmedia[at]yahoo.com wrote:

- quote -

That looks like a prohibited transaction to me. That means
if you do it, you're deemed to have closed the IRA and
distributed the entire balance with all the taxes and
penalties that implies.

Regards,
Bill

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miscellaneousmedia[at]yahoo.com wrote:

- quote -

The rules aren't that complex; they prohibit exactly what
you want to do. I don't know how you got the idea you could
invest IRA money in a business you own.

You cannot conduct any IRA transaction with a disqualified
person. Disqualified persons include yourself, your spouse,
any of your direct ancestors or descendants and their
spouses, and any entity 50% or more owned by such persons.
There are exceptions for the reasonable value of necessary
office space or services, but this benefits the custodian,
not you, by allowing the custodian to charge fees.

--
Chris Green

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"miscellaneousmedia[at]yahoo.com" <miscellaneousmedia[at]yahoo.com> wrote:

- quote -

That would be self dealing and is a prohibited transaction.

- quote -

Well aside from the fact that you can't do it?

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

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miscellaneousmedia[at]yahoo.com wrote:

- quote -

Simply put, you heard wrong.

ChEAr$,
Harlan Lunsford, EA n LA
Fri 18 Feb 2005

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"miscellaneousmedia[at]yahoo.com" <miscellaneousmedia[at]yahoo.com> wrote:

- quote -

Actually, taking cash from an IRA is a distribution, subject
to income tax and maybe penalties.

What you can do is have the IRA invest in a business. It
can't, however, be a business you already own, because that
is a transaction with a "disqualified person" (you) and
subject to penalties and income tax. It could also
disqualify the entire IRA.

There are companies that will manage IRAs with unusual
investments, like real estate and businesses; you also need
to consult with a pro to make sure you don't inadvertently
do something stupid.

--
Tom Healy, CPA
Boulder, CO
Web: http://www.tomhealycpa.com

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<miscellaneousmedia[at]yahoo.com> wrote

- quote -

No, you can't.

- quote -

So complex they don't exist.

--
Paul A. Thomas, CPA
Athens, Georgia
taxman at negia.net

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I understand I can take cash from my IRA and invest it in a
business I own, without paying taxes or a penalty, but the
rules are complex. I also wonder what happens if the
business is a hedge fund or similar margin-using investment
managament business/pool. How are the IRA funds segregated
in that business from non-IRA funds in a pooled account,
particularly with regard to the types of trades that can be
made. Or can the IRA funds only be used for the operation of
that business, not for trading capital? Complicated
question, I know. Bascially, I would like to use some IRA
funds to conduct trades that are not allowed in IRAs, and I
thought this might be a way.

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