NewsHK
A self-employed consultant in his late 50s received a tax bill for vintage Pokémon cards held in his solo 401(k), a result driven by federal rules rather than the assets' outperformance of the S&P 500.
The internal revenue service treats the acquisition of certain tangible personal property in a retirement account as a deemed distribution, triggering immediate taxation regardless of subsequent market value.
The consultant opened the solo 401(k) to protect business income and later enabled a self-directed feature that allowed him to select specific holdings.
He used this option to purchase professionally graded trading cards.
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