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Attorney Arcadier
Attorney Arcadier, Attorney
Category: Business Law
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Experience:  Contract questions and Incorporation questions answered.
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I want to start a business in NH using my 401K/IRA funds without

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I want to start a business in NH using my 401K/IRA funds without t tax penalty. Can you advise me on how to do this? I have been told that it is possible, but that it must be structured in a certain way. (Maybe as a "C" corporation that elects to be taxed as an "S" corporation?)

Thank you.

Attorney Arcadier :

Exactly right. You may do this by first incorporating as a C corp, and then filing form 2553 with the IRS within 90 days of incorporation. Once you have formed the S corporation then you can take out from your IRA or 401K without incurring the 10% penalty. Must keep all receipts of the company expenditures.



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