2007-02-16 03:06:07 · 3 answers · asked by Angela J 1 in Business & Finance ➔ Taxes ➔ United States
I loaned money on the basis of an investment. As in I will take part in the profits if any. Do need there investment statement to report it so I don't have to pay taxes on it?
2007-02-16 03:48:13 · update #1
From the IRS:
>>>>>The following are examples of prohibited transactions with a traditional IRA.
Borrowing money from it.
Selling property to it.
Receiving unreasonable compensation for managing it.
Using it as security for a loan.
Buying property for personal use (present or future) with IRA funds.
<<<<<
I believe that there are ways to invest in a private company via an IRA (ie self-directed IRA), but taking money out of it to invest in another company is not one of them.
You have a taxable distribution subject to the 10% penalty.
2007-02-16 03:53:21 · answer #1 · answered by Wayne Z 7 · 1⤊ 0⤋
If you loaned money from your IRA, you had a taxable distribution from your IRA and must pay taxes on it. If you were under age 59 1/2 and not totally and permanently disabled you would have a 10% penalty tax on top of that.
This is not an investment, you simply made a loan from your personal funds to someone else.
2007-02-16 11:32:02 · answer #2 · answered by Bostonian In MO 7 · 1⤊ 0⤋
if you have proof as in the case of a receipt etc, you loaned the money then you can use that as evidence to filed as an investment
2007-02-16 11:34:06 · answer #3 · answered by cyberbeauty 2 · 0⤊ 0⤋