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Rakhi Vasavada
Rakhi Vasavada, Financial and Legal Consultant
Category: Finance
Satisfied Customers: 4498
Experience:  Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
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I own some private placement stock. Can I transfer the

Customer Question

I own some private placement stock. Can I transfer the shares to a IRA or Roth?
Submitted: 9 months ago.
Category: Finance
Expert:  Rakhi Vasavada replied 9 months ago.
Dear Friend,Hello and welcome. Thank you for providing an opportunity to assist you. YES -- You can invest / own some private placement stocks through your IRA. However, there are couple of things that you should know. A private placement is composed of securities not registered with the SEC. Instead, the issuer takes advantage of Regulation D, which provides a few methods to sell unregistered securities privately to investors. The rules require that some or all of the private investors be "accredited." The owner of an IRA need not necessarily be an accredited investor to buy a private placement, but the issuer might insist upon it, because some private placements, such as those under Rule 504 of Regulation D, are open only to accredited investors. Under Rule 501 of Regulation D, an individual accredited investor must have either $1 million in net worth -- not counting a primary residence -- or at least $200,000 of income in each of the previous two years. If your IRA purchases private securities, you’ll have to wait to sell them. Under Rule 144, the holding period is six months to one year, after which you can sell the securities publicly. However, the wait ends if the issuer subsequently registers the securities with the SEC. During the waiting period, the securities are “restricted,” meaning you can’t sell them to anyone else. This might not concern you, because IRA investments are meant for the long run. If you withdraw a restricted security from a traditional IRA, you’ll owe taxes on the security’s fair market value as of the day of withdrawal. Normally, this value is a security’s public trading price, but since private placements don’t trade publicly, you must rely on other criteria, such as the latest price paid for similar securities from the issuer. I am sure this would help. You may please leave a positive rating if this helps as this is the only way we are compensated for assisting you. Alternatively, you may revert back with a reply if you need further assistance or if I have missed out on any aspect of your question. Warm Regards,
Customer: replied 9 months ago.
Let me clarify..I already own the shares. Can I transfer them to a IRA?
Customer: replied 9 months ago.
above question is clarification on origanal question.
Expert:  Rakhi Vasavada replied 9 months ago.
Dear Friend, Hello and welcome again. Thank you for your follow up reply. YES, you can do the same. However, the primary requirement remains same. You should have held those shares for more than one year. Other ramifications too remain same as explained in my original answer. I am sure this would help. You may please leave a positive rating if this helps as this is the only way we are compensated for assisting you. Alternatively, you may revert back with a reply if you need further assistance or if I have missed out on any aspect of your question. Warm Regards,

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