owner wants to buy company stock using rollover money

[Guest EPS2]

Owner employee has a qualified plan (there are no other employees), and wants to use rollover money from previous employer's plan to purchase company stock so that he can use it to invest in the company. The plan is regular DC plan (not an ESOP).

We would be amending the plan so that it allows for the purchase of company stock.

Where would I find sites to read on this to find out if this is possible, and the pitfalls of this arrangement. It seems too good to be true to me.

I would think that it would be a PT since it's basically a tax free way of using retirement plan assets to fund a business. Right?

Any help on this issue would be appreciated.

thanks

[A Shot in the Dark]

E:

This issue has been visited and revisited.

There are many threads and posts that you can review.

The fact of the matter is:

There are a few professionals that buy into this concept. Google ERSOP(s)

And many, many professionals that see this as a nightmare, frought with danger.

[david rigby]

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