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Daniel Kokhba
Daniel Kokhba,
Category: Business Law
Satisfied Customers: 1739
Experience:  Partner at Kantor Davidoff
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I funded my small business with funds from an IRA via a vehicle

Customer Question

I funded my small business with funds from an IRA
via a vehicle named the Pension Transfer Trust Plan,
a "qualified" plan as I understood it. The Plan purchased
shares of the new corporation. It was my understanding
that the "Plan" owns the shares, not me.
Now, a CPA tells me that the value of those shares
should be included in my RMD as though it is part of
my IRA......HELP!
Submitted: 2 years ago.
Category: Business Law
Expert:  Damien Bosco replied 2 years ago.
Here is what I found....Because the taxpayer is using direct rollover money to purchase shares of stock in his new business, there is no withdrawal; therefore there will never be a penalty tax or tax due on the transaction. Retirement plan assets are not being used to run the business, rather, cash proceeds from the sale of stock from the business to the plan are used. Therefore, the plan owns the “asset” (the shares in the business) and so long as the shares are not distributed or liquidated from the Trust, the rollover remains sheltered from taxes by the trust provisions of IRS section 501(a).

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