Contributed by Susan Foreman Jordan.
Over the last few years, a strategy has been utilized whereby accumulations in 401(k) plans and/or IRAs are used as the source of financing business acquisition and startup, taking advantage of existing law which permits profit sharing plans to invest up to 100 percent of their assets in employer stock. The strategy, which has been dubbed by the IRS as Rollovers for Business Startups (ROBS, for short), has been made widely available to individuals seeking to acquire franchise interests, but recent announcements by the IRS and Department of Labor have raised concerns that certain abuses may invalidate the otherwise available tax benefits.
Continue reading “Rollovers for Business Startup: Professional Guidance is Critical.”