Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (9) | Ignore Thread Prev | Next
Author: gdett2 Big red star, 1000 posts Old School Fool Ticker Guide Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 294  
Subject: Re: Use 401K as collateral? Date: 8/16/2011 11:52 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
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
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (9) | Ignore Thread Prev | Next

Announcements

Post of the Day:
Macro Economics

2.1: The Labor Pool Problem
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement