DRAFT — pending professional review

NOT LEGAL OR TAX ADVICE. This module is reference material for the HigherSelf Network cohort. Pending Lumina tone review, outside-CPA review, ERISA-counsel review for any Solo 401(k) or ROBS section, and Grace Fields authorization before external publication. Cohort-facing facts use anonymized framing until written consent is on file.

retirement access strategy

ROBS — Rollover as Business Startup

IRC § 4975 (prohibited transactions); IRS Memorandum, Oct. 1, 2008

Eligibility

Best when: Capital-intensive business, balance ≥ ~$75K, willing to operate as C-corp, will not exclude employees from plan.
Do not use when: Single-location service business; planning to hire and exclude rank-and-file employees; horizon for fast pivot.
Cap: Up to full plan balance

Documentation

C-corp formation
Qualified plan documents
FMV stock appraisal at issuance and periodic re-appraisal
Annual Form 5500
Nondiscrimination testing per Treas. Reg. § 1.401(a)(4)-4
ERISA-counsel review

Risks & warnings

Anti-abuse anchors:

Peek v. Comm'r, 140 T.C. 216 (2013)
Ellis v. Comm'r, T.C. Memo 2013-245, aff'd 787 F.3d 1213 (8th Cir. 2015)

Penalties if mis-structured:

§ 4975 excise tax: 15% initial, 100% if uncorrected
Plan disqualification
For IRAs: full deemed distribution under § 408(e)(2)

Applies to

HigherSelf Network

Interacts with

Qualified Small Business Stock — § 1202

Research only — not legal or tax advice