Hello, Mark and Mat, I am a HUGE fan of the podcast, I had a potential investment opportunity come up and I was wondering if it would be a prohibited transaction.
Mat, I have a friend who has just opened a small coffee stand business in my area, I prepare his taxes for him and will be in the future as well. Would I be able to take funds from my solo Roth 401k that I have at Directed IRA and invest that into his business? I am worried since I am a CPA and I know the prohibited transaction rules are tricky, I value my license greatly and do not want to put it in harm’s way, as well as my retirement fund! Would I be able to both invest in his company AND still be his tax accountant?
I love your podcast and the value and education you bring to the industry is unprecedented, you have my sincere thank you!
Devin, I’m so sorry. Due to a computer glitch we missed this question for some reason. Please forgive us. So anyway, I loved it so much we answered it on our our last podcast. Please check it out and we hope my comments were helpful. Mark.
No problem at all, I am sure you two are very busy always. I do miss the weekly podcast episodes! I think they’re fantastic, they really put tax code into realistic situations that are digestible for young practitioner to improve their skills. It’s exciting to get on the podcast at all! I will be sure to listen in immediately. I actually hopped onto the directed IRA’s podcast and started listening from episode 1, so I wanted to catch up on both. Main Street Business is a little bit more applicable to me right now, but I want to work self-directing in for my more established clients.
I am currently trying to be a part of your advisor program as well, it is a little expensive for where I am at currently in my career, but I want to come aboard eventually, regardless of pricing. Right now, I am choosing between healthcare, funding retirement and paying myself, but that’s part of the “fun” of opening your own business and building it. So, I am enjoying the process for now, but I would love to get up to par with some of my older peers and their practices and scale from there.
So, again, thank you sincerely for all that you do, and I should hopefully be putting my money where my mouth is soon!
Mark, I listened to the episode, I really appreciate you answering my questions thoroughly. It was pretty cool to get on the podcast! I hope you aren’t pulling your hair out this tax season, I know I am! but, it’s part of the fun/challenge of starting a business.
I had a question about a tax strategy that I had just learned. It involves buying into an entity, and receiving a negative K-1 that is a multiple of the investment to create a tax loss to use. It was being pitched at a real estate meeting, at first I was ready to walk out of the room, but they provided a qualified letter and apparently have been through some audits. I wanted to see what your take on the situation is, I have a hunch it does not really hold much water. If you wanted I could try to share what I learned, I have an info sheet and I paid good attention to the presentation.
Not necessarily a podcast question*
I understand if you are busy and do not have time to talk **