qualified alternative investment
clients under 59 1/2 and invests 50k in an alternative “business development company” BDC that pays 7% dividend.
this investment is bought at the A share level not in a brokerage account.
the client does not want to pay taxes on the dividend.
a. can he reinvest the dividend with out being taxed on it?
b. does he have to taxes on the dividend whether he takes it or reinvests it?
c. when the company liquidates the fund in 3yrs and sends back the original investment of 50k or higher to the client, will the client be able to do the 60 day rollover?
Thank you,
Douglas
Permalink Submitted by Alan - IRA critic on Mon, 2017-03-20 23:33
Is the investment being made with IRA funds in a self directed IRA? If not made with retirement funds, the proceeds in 3 years cannot be rolled over. Dividends would generally be taxable unless there is some special provision applying to this investment. To be sure, client should read the prospectus or other report on the investment or ask the issuer of the shares if it is not clear.