1 - https://www.investopedia.com/terms/b/backdoor-roth-ira.asp
https://en.wikipedia.org/wiki/Tax_Increase_Prevention_and_Re...
You can have millions of liquid assets and not have any income and be eligible for income related thresholds.
You dont need to be taking advantage of net operating losses or charitable deductions for any of this.
If Thiel made this contribution for tax year 1998, then this would be before they even took any external funding. It's quite conceivable that he received an exceptionally low salary that year and relied on savings.
There was some snark that was edited out.
> Plenty of founders are receiving salaries below that threshold in 2021, even after raising money.
Yeah, that's the mechanism, but being in a position to decide what what your taxable income will be is a loophole in itself, one that's pretty much only available to the wealthy and people who run businesses. I'm sure Thiel was both at the time.
mmmm not a loophole, the government encourages entrepreneurship and created tax deferred plans because social security is flawed and inadequate and pensions also shouldnt be expected by the general population
Having a self directed IRA with some good trades in it is the expected outcome
No. Roth IRA's have contribution limits, and at a minimum I'm sure he exploited some loophole to get his adjusted gross income down below $110,000 so he could make that $2000 contribution in 1999 (https://www.irs.gov/pub/irs-prior/p590--1999.pdf). Look at his work history:
> https://en.wikipedia.org/wiki/Peter_Thiel: He then earned his J.D. from Stanford Law School in 1992.[7] After graduation, he worked as a judicial law clerk for Judge James Larry Edmondson of the U.S. Court of Appeals for the Eleventh Circuit, as a securities lawyer for Sullivan & Cromwell, as a speechwriter for former-U.S. Secretary of Education William Bennett, and as a derivatives trader at Credit Suisse. He founded Thiel Capital Management in 1996. He co-founded PayPal in 1999, serving as chief executive officer until its sale to eBay in 2002 for $1.5 billion.