How Peter Thiel saved millions in taxes and so can other startup founders

Peter Thiel has been making headlines the past couple of weeks over leaked data obtained by ProPublica.

ProPublica’s report claims Thiel’s Roth IRA was worth less than $2,000 in 1999, which then increased to more than $5 billion at the end of 2019.

When Thiel turns 59 ½, he can withdraw all of the money tax-free.

Thiel used his Roth IRA to buy 1.7 million shares of PayPal in 1999 at $0.001 per share ($1,700 total) – a few years before the company went public in 2002.

Although it may seem unfair, there is nothing illegal about this strategy, and there is nothing to say other startup founders can’t do the same.

We previously detailed how founders can utilize a ROTH IRA last year with our blog: How one founder could pay no taxes on a $196M gain with a ROTH IRA.

In that blog, you’ll find more information on what a ROTH IRA is, potential pitfalls, other examples of success stories, and things to consider before investing.

Additionally, below you’ll find some more reading on the Thiel situation and what it means for your ROTH IRA:

Photo of Peter Thiel courtesy Inc.