ROBS vs Self-Directed IRA
Directed IRA Podcast
ROBS Setup and Its Tax Tradeoffs
Mat Sorensen outlines the C corporation, 401(k), stock purchase, salary, corporate tax, and traditional retirement-income consequences of ROBS.
If you're ready to explore investing your retirement savings outside of traditional Wall Street investments, a Self-Directed IRA may be an option worth considering.
In this episode of the Directed IRA Podcast, Mat Sorensen and Mark J. Kohler break down the ROBS (Rollover as Business Startups) strategy and compare it to using a Self-Directed IRA to invest in a business. With so much misinformation circulating online and on social media, we’re separating the facts from the hype and explaining how these strategies actually work.
We discuss why ROBS can make sense for someone who wants to use their retirement funds to buy a business or franchise and work in that business, while also breaking down the complexity, tax implications, compliance requirements, and ongoing costs that come with the structure.
In This Episode, We Cover:
- What is a ROBS? How the strategy allows retirement funds to invest in a business you intend to operate.
- ROBS vs. Self-Directed IRA: The key differences and when each strategy may make sense.
- The tax implications: Why the tax outcome of a traditional ROBS structure may not be as attractive as it sounds.
- Roth strategies: How using Roth retirement funds can potentially change the tax equation.
- Buying a business with an IRA: How a Self-Directed IRA can invest in a business without the account owner working in the business.
- Prohibited transactions: Why working in a business owned by your IRA can create problems.
- The complexity of ROBS: C corporations, 401(k) plans, reporting requirements, salaries, and ongoing maintenance.
- Alternative ways to fund a business: Including the potential use of a Solo 401(k) loan.
- Real-world examples: Including the story of how Peter Thiel used a Self-Directed Roth IRA to invest in PayPal.
For questions or to learn more about this episode's topic, book a call with an IRA specialist here: https://directedira.com/appointment/
Interested in learning more about alternative investments? Join us this year at the Alternative Asset Summit October 22 & 23, where you'll hear from industry experts and connect with like-minded investors exploring new ways to build wealth: https://altassetsummit.com/
Other:
Mat Sorensen: https://matsorensen.com
Mark J. Kohler: https://markjkohler.com/
KKOS Lawyers: https://kkoslawyers.com
Main Street Business https://mainstreetbusiness.com
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