The Motley Fool Discussion Boards

Previous Page

Retirement Discussions / Retirement

URL:  http://boards.fool.com/foolishmiser-i-have-been-away-from-this-thread-29482267.aspx

Subject:  Re: Use 401K as collateral? Date:  8/16/2011  11:52 AM
Author:  gdett2 Number:  278 of 294

FoolishMiser,

I have been away from this thread for a while.

So, at this point your $2M 401K is now invested in a business. How is this going to pay the bank loan?

Proceeds from the business will be taxable for federal and state corporate rates.

I do not see anything here that I have learned about 401Ks other than there are a number of ways to make them complicated.

If I wanted a business to run in the future, this method is a way to do it, but I believe there is more to it than this very brief explanation. Also, I wonder if there is an additional tax consequence to selling the business in the future.

If this scheme was so simple and was a guaranteed tax dodge, nearly everyone would do it.

Gene
Copyright 1996-2014 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us