Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (4) | Ignore Thread Prev Thread | Next Thread
Author: susan400 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121567  
Subject: solo 401 / stk as compensation Date: 4/15/2011 9:34 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
if a self employed individual, sole propiator , is not incorporated and doesn't issue W2s to himself,
canb he still establis ha 401 solo?

2) a consuttant helps a start up comonay and vs cash cempensation he recieves anm equity interest.

5 yrs later he sells, is it cap gaon?

was it a taxable event originally at the time of reciept?

TIA susan
Print the post Back To Top
Author: irasmilo Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 113137 of 121567
Subject: Re: solo 401 / stk as compensation Date: 4/15/2011 9:41 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 1
if a self employed individual, sole propiator , is not incorporated and doesn't issue W2s to himself,
canb he still establis ha 401 solo?


Yes, but if you're thinking of doing this for 2010, it's too late. The plan had to be established by 12/31/10 even though funding could be deferred until the filing of the 2010 tax return.

2) a consuttant helps a start up comonay and vs cash cempensation he recieves anm equity interest.

5 yrs later he sells, is it cap gaon?

was it a taxable event originally at the time of reciept?


Yes and yes.

Ira

Print the post Back To Top
Author: susan400 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 113148 of 121567
Subject: Re: solo 401 / stk as compensation Date: 4/16/2011 9:01 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
Ira- thanks for your reply. Ths will be for 2011 so it needs to be established by yr end 2011.

If the reciept of the equity interest was taxable upon receipt,
how would one value that?

It is worth 0 or something some day, so place a speculative value on it?

TIA
susan

Print the post Back To Top
Author: irasmilo Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 113149 of 121567
Subject: Re: solo 401 / stk as compensation Date: 4/16/2011 9:16 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
If the reciept of the equity interest was taxable upon receipt,
how would one value that?

It is worth 0 or something some day, so place a speculative value on it?


You get a professional valuation of the business as of the date of the equity transfer and the value you receive (% of equity) is the taxable amount. This becomes your cost basis in the business for use in calculating any future capital gain or loss. (The preceding is an oversimplification. If you are going down this route, it is essential that you get competent professional legal and accounting assistance before any transaction occurs.)

Ira

Print the post Back To Top
UnThreaded | Threaded | Whole Thread (4) | Ignore Thread Prev Thread | Next Thread
Advertisement