Is it possible to use 401k or IRA money to fund a business venture?
With a 401(k) not that I can see. You can always “borrow” 401(k) money but it is a bad idea for many reasons. With an IRA, perhaps: “The stock of an S corp may not be held by a self-directed IRA. Alternatively, it may be possible for a self-directed IRA to make a loan to an S corp. BUT, if the loan is made to an S corp (or any other entity) that is owned 50% or more by you or a “disqualified person” as defined by the IRS, this would be considered a “prohibited transaction.” The penalty for such a prohibited transaction would be a determination by the IRS that the IRA has been fully distributed and the imposition of taxes on the value of the IRA. One workaround might be to have the self-directed IRA make a loan to someone you trust–someone who does not fit the definition of a “disqualified person”–who would then make a loan to your S corp. Disqualified persons include but are not limited to your “spouse, ancestor, lineal descendant and any spouse of a lineal descendant.” For a full de
