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Old 06-05-2012, 03:41 PM
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Can a Taxpayer hold an S Corporation Stock in a ROTH IRA?

Well, the answer to this question according to a recent Tax Court case is that "a Taxpayer cannot use a ROTH IRA to hold S corporation Stock."

The IRS however, permitted that the Taxpayer could hold stock in a Regular C corporation.

The reason for disallowing the S Corporation from being held in an ROTH IRA account is "that the S Corporation's earnings or profit would escape from being taxed and, once the ROTH IRA owner becomes eligible for qualified distributions, any payouts would have been tax free."

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