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Do you have a 401k? - Page 2
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Thread: Do you have a 401k?

  1. #11
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    Quote Originally Posted by chroNick View Post
    Yea I dunno.. but anyways, a ROTH IRA will enable you to buy and sell silver without having to pay any capital gains taxes.
    well that's one I have experience with.

    you do have to reach the required age limit first to withdraw any profits tax free.

    plus you can't simply enter a ROTH and turn around and withdraw gains no matter how old you are without having your funds tied up for the required time period first. It has to be a five year period, but not actually five full years. Starting in December counts as year one even though you only have your funds tied up for 31 days or less.

    You can buy and sell all you want during that five years just as long as you leave your funds in your ROTH account.

    Without looking this up under current IRS tax rules, I don't know if these rules have changed over the past six years.
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  2. #12
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    Here you go, an article that explains in much more detail a way to fund a business:

    http://www.franchisegrade.com/index....se/#comment-26

  3. #13
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    Quote Originally Posted by jimi View Post
    Here you go, an article that explains in much more detail a way to fund a business:

    http://www.franchisegrade.com/index....se/#comment-26
    Thanks for that explanation. But you do need to have self direction of your 401K to use it this way, but you can use an IRA account.

    so what is the end result of those 401K and IRA accounts. Sooner or later your going to have to pay taxes unless your business fails and your investment turns to zero. This article doesn't address this point. If your franchise turns into a multi-million dollar operation, will the IRS be willing to settle on your paying taxes on your original amount invested in your franchise or what your franchise is now worth?

    Either way it's a cheap way of accessing funds you might have access to.

    Very often most of us can't gain access to those funds even if we leave a company. People agree to terms they don't understand what they signed up for. Life time annuities are the suckers bet and sellers most profitable.
    Last edited by valerb; 27th November 2014 at 17:29.
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  4. #14
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    I don't understand 'will the IRS be willing to settle on your paying taxes on your original amount invested....'

    Correct me if I'm wrong but there are a handful of situations that TRIGGER a penalty and tax liability same year as withdrawn.

    Such as:

    • cash out prior 59 1/2 (10% penalty plus withdrawal added to regular earnings for year)

    • failure to pay back hardship withdrawal by end of year (ditto)

    • failure to pay back loan (ditto)

    • regular structured withdrawal (treated as regular earnings for year)

    • a home loss prevention feature (penalty plus tax, I think)

    • a medical feature (penalty plus tax, I think)

    And there are those that don't:

    http://www.bankrate.com/calculators/...alculator.aspx

    • The example we are speaking of
    Last edited by jimi; 28th November 2014 at 08:00.

  5. #15
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    Quote Originally Posted by chroNick View Post
    Yea I dunno.. but anyways, a ROTH IRA will enable you to buy and sell silver without having to pay any capital gains taxes.
    I wasn't referring to an early withdrawal, but down the road when you have to settle up one way or another.

    both a ROTH and IRA when self directed allow you to buy and sell as long as your funds never leave your brokerage account.

    it doesn't matter how many transactions you make, the broker keeps track of your gains or losses based on the amount you actually put into the account.

    your tax liabilities never come into play until you actually want to remove some funds and if you have met all of the age and time requirements, there are no tax liabilities for a ROTH account.

    So how does this effect your tax liabilities down the road since your contributions were before taxes? In your case your franchise is more or less your brokerage account based on it's value or what?

    Or are you suggesting that using your 401K money to fund a business relieves you of any future tax liabilities on those 401K funds used?

    You said it was an advantage to use your 401K to start a business through a c-corpoation. I'm just trying to understand how and when you pay taxes on those funds removed from your 401k.

    Sorry jimi, this was supposed to be attached to your message above. Working on a cell phone can be a bitch.
    Last edited by valerb; 28th November 2014 at 15:56.
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  6. #16
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    Quote Originally Posted by valerb View Post
    Or are you suggesting that using your 401K money to fund a business relieves you of any future tax liabilities on those 401K funds used?

    You said it was an advantage to use your 401K to start a business through a c-corpoation. I'm just trying to understand how and when you pay taxes on those funds removed from your 401k.
    It's the story of my life; I do not have an exit strategy.

    Two and a half years ago, I leapt at the opportunity to own a business, not a mutual fund or a stock. The C Corporation was the way to go at the time, but soon we may organize under another alphabet soup letter. When that day comes our consultant will walk us through that process. I will be happy to get back with you at that time.

    And, no to your first question, I'm not suggesting anything of the sort.

  7. #17
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    Quote Originally Posted by jimi View Post
    It's the story of my life; I do not have an exit strategy.

    Two and a half years ago, I leapt at the opportunity to own a business, not a mutual fund or a stock. The C Corporation was the way to go at the time, but soon we may organize under another alphabet soup letter. When that day comes our consultant will walk us through that process. I will be happy to get back with you at that time.

    And, no to your first question, I'm not suggesting anything of the sort.

    I didn't think so, but you never know when it comes to government breaks for business.

    My primary interest is how they go about determining the tax on those funds invested, which sounds like you'll find out one day.

    At least you found a way to put those funds to work for you versus having them set in a brokers account forever.

    My wife made the mistake of signing up for a life time annuity at work many years ago and she couldn't get out of it. They really used slick presentations that made a lemon sound like anything but. Her only option was to stop contributing. she couldn't withdraw the funds. Then one day her company change investment companies and they all had the chance to start over with a new plan, my wife bit the bullet and withdrew all her funds and paid the penalty before the funds were tied up again..

    Sometimes you make mistakes and you are stuck with them forever and sometimes you luck out and have a one time chance to get out of a bad thing.
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  8. #18
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    What's a 401K?

  9. #19
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    Quote Originally Posted by Katwoman View Post
    What's a 401K?
    It's the latest thing in vitamin pills
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  10. #20
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    Quote Originally Posted by valerb View Post
    It's the latest thing in vitamin pills
    Will buying into all the hype over these pump and dump you up?

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