> Only if the alternative was holding it in some other tax-advantaged account like a traditional IRA.
How much revenue (income tax, capital gains, whatever) does the IRS receive for an investment whose value drops to $0?
Also, no fraud needed to happen. He earned the money from Confinity, paid taxes on it, invested in some of his (very risky) shares with the IRA and then it paid off over the next 2+ decades.
If you have evidence of this kind of fraud, please let us know. If it were to exist, you'd probably see some evidence (e.g. parallel books, skepticism from investors). ProPublica has tax and other records and they seem to have no evidence that supports your claim whatsoever.
Isn't the most likely story that he put his shares in this account, his company did take off and now he has continued to grow it?
The company’s future is very unclear and subjective, and informed investors make bets using their experience and the market determines the price.
But that’s for the preferred stock.
The employees are compensated with common stock, which is valued at some fraction of that. There is often no market price since it’s not sold to investors. It’s also very unclear and subjective, and the reported value is picked by the company in a situation where everyone wants it to be low.
The first result Googling it (DLA Piper) says it often used to be determined by just dividing the preferred stock price by 10, until accounting rule changes in the early 2000s.
I think “fraud” is a bit strong here - it’s very subjective after all - but it may not exactly be a fair market price either.
I'm not claiming fraud. I'm claiming he bought the shares for less than the fair market value.
It's probably not illegal, but it should be (buying below market value in an IRA, not buying below market value in general), because it makes a mockery of the contribution limits for IRAs.
How much revenue (income tax, capital gains, whatever) does the IRS receive for an investment whose value drops to $0?
Also, no fraud needed to happen. He earned the money from Confinity, paid taxes on it, invested in some of his (very risky) shares with the IRA and then it paid off over the next 2+ decades.
If you have evidence of this kind of fraud, please let us know. If it were to exist, you'd probably see some evidence (e.g. parallel books, skepticism from investors). ProPublica has tax and other records and they seem to have no evidence that supports your claim whatsoever.
Isn't the most likely story that he put his shares in this account, his company did take off and now he has continued to grow it?