My client would like to invest in a start-up (he has no relation to this business) by purchasing a SAFE note. (A Simple Agreement for Future Equity (SAFE) note is a financial contract that allows startups to raise capital from investors in exchange for future equity in the company. SAFE notes are a type of convertible security, similar to a warrant or option, that gives investors the right to purchase company shares at a future price.)
He would like to roll over his traditional IRA to a Roth IRA (paying all taxes this year), and have the ROTH IRA purchase the SAFE note.
Any problems with this arrangement?
Thanks for any insights,
Jay M. Menachem, CPA 300 Garden City Plaza, Suite 448
Garden City, New York 11530
Tel: 516-877-9277 Fax: 516-877-9677
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