I’ve been reading up on how Peter Theil was able to make billions in his Roth IRA and not owe any taxes but it still doesn’t make sense to me.
From what I understand, he was the CEO of PayPal and received founders shares for a small amount that exploded in value.
I understand other people’s questions regarding whether the shares were appropriately valued, and whether he was able to contribute to his Roth IRA, but that’s not my question.
My question is how was he able to get around the self dealing rules if he was the CEO and cofounder of PayPal? Would I be able to do a similar thing of buying a rental property and actively managing it? I believe that would be considered self dealing but I don’t really see the difference.
How was Peter Theil able to invest in PayPal through his Roth IRA? Wasn’t it self dealing?
byu/Ok_Shake_368 intax
Posted by Ok_Shake_368
1 Comment
I’m not understanding how there’s self dealing in the transaction — that’s the purchase of property you own/control with existing IRA funds, often at a below-market price. He did not use existing IRA funds to BUY his founder shares. As I understand it, the founders shares were CONTRIBUTED to the IRA. You may not be able to use your IRA to buy property you own, but you can certainly contribute your existing property to an IRA (within contributions limits).