I found a great opportunity with a company grossing $2M and netting $600K. The owner is willing to provide 90% seller financing and I have more than enough cash to fund the business purchase. My understanding is that a big drawback of a ROBS 401k is the the double taxation because of the c-corp structure.
If I don't need it for the. liquidity, Are there other meaningful advantages of funding my business purchase with a ROBS 401k vs. directly? Tax deferral could be one, but with the corporate tax rate at 21% and my effective personal income tax at 33%, I'm not sure if it is truly a meaningful benefit.
Any thoughts or advice would be appreciated!
Update: I created this decision matrix to capture my understanding. Is this accurate, or are there other points of view missing?
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