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Bill
Bill, Enrolled Agent
Category: Tax
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Experience:  EA, CEBS - 35 years experience providing financial advice
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My Roth IRA owns a startup service company with 1 employee,

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My Roth IRA owns a startup service company with 1 employee, my sister. What income tax filings (besides her personal) have to be made.
HelloCustomer



Is this company established as a corporation or other type of business entity?



Customer: replied 7 years ago.
no company yet. looking to form an llc.
Customer

 

Does your Roth IRA already own the startup company?

Customer: replied 7 years ago.
No it owns stocks. I was thinking about selling them after retiring next year and starting a small service company with my sister as sole employee. was hoping that any profits would then be tax free but I can't figure out what tax reporting has to be done besides her personal taxes.

Investing in a start-up company with the funds in the Roth IRA is a strategy that the IRS is currently scrutinizing. If you do want to pursue this then you would need to work with an attorney who has experience in this area and find a trustee that is willing to hold and administer the account. See link below:

 

http://www.irs.gov/pub/irs-tege/rollover_guidelines.pdf

 

 

Bill, Enrolled Agent
Category: Tax
Satisfied Customers: 3152
Experience: EA, CEBS - 35 years experience providing financial advice
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