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I currently have funds invested in a 401(k) through my employer. I wish to use these funds to purchase stock in an S-Corporation. I was wondering what is the best way to do this? I am aware that a self directed IRA cannot purchase shares of an S Corp. I was curious if there is any other way of setting it up so that I can use these funds?
ANSWER
Expert Joseph Caplan's Answer:
There really is no way to distribute the funds with the intention of forming a business without being penalized and taxed. You can withdraw the funds penalty-free for a limited number of reasons (ie. purchase of a new home, college expenses, medical expenses, etc.)
