| Can a Taxpayer hold an S Corporation Stock in a ROTH IRA?
Well, the answer to this question according to a recent Tax Court case is that "a Taxpayer cannot use a ROTH IRA to hold S corporation Stock."
The IRS however, permitted that the Taxpayer could hold stock in a Regular C corporation.
The reason for disallowing the S Corporation from being held in an ROTH IRA account is "that the S Corporation's earnings or profit would escape from being taxed and, once the ROTH IRA owner becomes eligible for qualified distributions, any payouts would have been tax free."
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