Guidant 401(k)

[Acownt4it]

Does anyone have any experience or stories to tell regarding people rolling their 401(k)s into a new 401(k) that is invested in person's new C-Corp?
I have a possible new client doing just this. He is taking his 401(k) of $200,000 and rolling into a new Guidant's (name of investment company) 401(k). Then new 401(k) invests in a C-Corp and " and the business is debt-free and cash-rich from the sale of the stock" per the website. https://www.guidantfinancial.com/pro...ncing/how.aspx
I would like to know what the pitfalls are to this type of situation.

[JohnH]

I can't concentrate on the explanations on their web site due to all the noise from the alarm bells going off in my head.

[joanmcq]

Pitfalls.....um, causing the plan to become disqualified due to self dealing? I'm with John; the alarms are screaming red.

This has been going around for awhile; it's the newest of the 'self-directed IRA' schemes. I'd advise your client to steer far away from this idea.

[JG EA]

I have a client who did this. I told him I couldn't do his corp for him because I didn't like it at all. I also didn't want to associated with the move of all his hard earned retirement money going down the drain in a failed venture. And it is failing. They are trying to keep going hoping the economy will pick up.I still do the personal return. There is no payroll at all from this corp, so he has to work at another job to put food on the table.