IRS Memorandum

 

Recently, several STC clients have contacted our Client Services Department to discuss the possibility of using IRA or 401(k) rollover funds to finance a startup business that they would receive compensation from. This is much different than using your IRA funds to invest in a startup company as a passive investor. Even though there are several companies that promote this type of structure, it has always been STC's stance that this would be viewed as a prohibited transaction and now an IRS memorandum confirms that position.