I had an appointment the other day with a potential new client (PNC) who is starting a Rollover For Business Start Ups (ROBS).
Basically, ROBS are where you rollover your retirement plan, and start a C Corporation. You then purchase the stock of the C Corporation, and start your business. You can also use a ROBS to purchase an existing business.
The PNC goes on to explain that they will sell their house in June. The proceeds in the ROBS will be $450,000, coming from a 401(k). She will use the $350,000 to by an RV, which will be her main home. The C Corporation will run a traveling consulting business and personal coaching.
Her idea is that she can travel around the country in her RV, blogging and promoting the “nomad” lifestyle. She wants to know what my thoughts are on this concept. Now, this person’s main home will be this RV. She was told by other accountants that there was no problem with this.
Let’s explore this for a second. Let’s say that this PNC had a main home, and also had a ROBS that bought the RV, that was used 100 percent for business. I could entertain that idea. The RV would be open to Special Depreciation Allowance (SDA), or if there was a profit Section 179.
About Craig W. Smalley, EA
Craig W. Smalley, MST, EA, has been in practice since 1994. He has been admitted to practice before the IRS as an enrolled agent and has a master's in taxation. He is well-versed in US tax law and US Tax Court cases. He specializes in taxation, entity structuring and restructuring, corporations, partnerships, and individual taxation, as well as representation before the IRS regarding negotiations, audits, and appeals. In his many years of practice, he has been exposed to a variety of businesses and has an excellent knowledge of most industries. He is the CEO and co-founder of CWSEAPA PLLC and Tax Crisis Center LLC; both business have locations in Florida, Delaware, and Nevada. Craig is the current Google small business accounting advisor for the Google Small Business Community. He is a contributor to AccountingWEB and Accounting Today, and has had 12 books published on various topics in taxation. His articles have also been featured in the Chicago Tribune, New York Times, Yahoo Finance, Nasdaq, and several other newspapers, periodicals, and magazines. He has been interviewed and been a featured guest on many radio shows and podcasts. Finally, he is the co-host of Tax Avoidance is Legal, which is a nationally broadcast weekly Internet radio show.