I early withdrew IRA to invest in my employer Class B private shares (I’m a shareholder) and receive a K-1 (but $0 profit)...does this qualify as ‘converting’ or rollover

[cbennett51]

I had a rollover IRA from years ago that I withdrew money from, paid 10% taxes at the time of withdrawal and invested this money in my company shares.  We are employee owned, can I reduce tax liability as this money was reinvested in something?

[MinhT1]

No, taking an IRA distribution to invest in shares of the company you are working in does not entitle you to any tax deductions or credits at the time of investment.

[cbennett51]

Is there a way to record my investment to my shares with my employer as something that will help my tax liabiiity?

[ToddL99]

Unfortunately, there isn't a special tax break available for reinvesting IRA distributions in a non-retirement investment such as public or private securities.

Once you remove funds from a qualified retirement account, they lose any special tax treatment (other than if you made a qualifying rollover).

When you sell those shares, however, the amount you paid for them will count as their cost basis and will reduce the taxable gain on the sale.

[cbennett51]

My financial institution did not have any cost basis information for the monies I withdrew.  If I can figure out what that was, could it reduce my tax liability on this withdrawal?