Yes, I’ve read that article. It essentially boils down to the author insinuating that all wealth must be the product of some nefarious scheme and that these people who simply followed the law some how did something wrong. Very biased reporting in my view.
I found the article inspiring. How many people would have the foresight to do what he did and delay gratification by locking up that kind of wealth until the age of 59.
No its not, it's to encourage certain behaviors. In this case saving for retirement by using already taxed income instead of paying those taxes when you retire. You can read the article I linked to below to see how it was abused in this instance.
This sort of fits into the encouraged behaviors though:
Put aside some money for the future.
Invest the money into company stocks, generally.
(Hopefully) having made good investments, have more money in retirement.
Retire and have some tax free money.
Most investments don't apprechiate quite so much, of course, but there were no rules on investment returns, only about contributions (and restrictions on self-dealing which may very well apply)
Except you just get taxed up front with a roth. You still get taxed.
You are at no greater advantage in growing your money after tax unless the tax code changes. (tax code change risk is the only reason people go with a roth). It just provides certainty.
A tax haven is a nation with low to no taxes, where foreigners can operate for tax purposes.
The term you are looking for, and almost had, was "tax avoidance".
Tax avoidance is perfectly legal. It is tax evasion that is illegal.
Investing your Roth IRA in a company your the CEO of like Peter Thiel did is illegal, making this tax evasion.
As to why it’s illegal, selling an arbitrary number of shares in your private company to yourself for 1$ then buying it back from yourself at say 1 billion dollars is normally legal. So, without such limits everyone could move unlimited money into a Roth IRA.
The penalty being low doesn’t prevent this from being fraudulent. Second, the transaction doesn’t need to be unwound for the funds not to be in the Roth IRA.
The timing of his “investment” is also off, he put the funds in after a seed round. Therefore those shares where worth far more than the annual Roth IRA contribution limit.
To you the words “illegal” “tax evasion” and “fraudulent” all may be synonyms, to me they are not. The consequences are the only thing I care about, and there is no authority that could view those words as synonyms. The IRS nor any other part of the executive branch could view it as tax evasion or fraud, the courts could not either, and Congress made this product out of their own desperation. As Congress is still desperate for short term revenues its unlikely they would alter the Roth product.
You can sell shares at arbitrary discounts especially when there are not liquid markets. If stock options are more necessary to circumvent accounting then in the money options can be used as well, with the Roth purchasing the stock options instead of earning it and getting more money in future years to purchase the in the money stock.
If the government wanted an unlimited Roth IRA cap they wouldn’t have added a Roth IRA cap. The fact they added a cap shows clear intent, which is definitely how the courts view such forms of Tax Evasion.
Now the government doesn’t go after the vast majority of criminals be that the IRS, FBI, or your local cops. However, that has no impact on what is or isn’t breaking the law as written. As such this was clearly tax evasion because it’s illegally reducing taxes he would owe and it’s fraudulent activity because it’s falsifying financial records for personal benefit. Hell was likely also wire fraud depending on how he submitted tax documents, not that such charges are normally tacked on to such cases but they still apply.
> He complied with the contribution cap and the income cap that year.
Not if he used am old pre round validation after the investment occurred at a higher valuation as has been reported.
Also your penalties where off: However, if the individual for whom the IRA was established or the IRA’s beneficiary engages in a PT with respect to the IRA, the sanction is the loss of the tax-exempt status of the IRA as of the first day of the taxable year in which the PT occurs.
As such, all transactions after the original transaction lack their tax exempt status. As such based on listed rules and including interest and penalties and he’s potentially facing a multi billion dollar tax bill.
I wonder if there will be increased interest in more privacy focused cryptocurrencies like Monero? I don't follow this news closely so I am genuinely curious if anyone has any insights.
I thought I saw a chart where it was the second-most-accepted coin, but I couldn't find it, so I may be wrong.
I did find a chart where it is the 4th most accepted after BTC, LTC, and ETH.
I imagine those other coins are more accepted because they have larger network effects. I also imagine that Monero's network will grow even more as it becomes more developed.
"But the thought of someone coming along and making a new social network, one that doesn’t have Facebook’s flaws, seems hopeless. After all, if Google, with all its vast wealth and talent, couldn’t do it, then who could?"
Instagram, WhatsApp, Snapchat... The greater issue to me doesn't seem to be who can beat Facebook but rather, what's going to keep Facebook from buying up any real threat that's not backed by one of the big 5 tech giants.
Making android more secure than iOS is out of reach for the vast majority of people. Most android devices sold don't even get regular security updates.
