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How can I use a $50K loan from my 401(k) as part of my EB-5 investment?

I want to use a $50K loan from my 401(k) towards my EB-5 investment amount. There is a clear documentation of the funds and the source of funds is clear. However, I am not sure if a "loan", even though I am "borrowing" from my own funds will work for the USCIS. Does it have to be a withdrawal? I would prefer not to have to pay penalties and taxes associated with a withdrawal.

Answers

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    Julia Roussinova

    Immigration Attorney
    Answered on

    This type of loan should qualify as long as you can demonstrate by documentation that the loan is secured by the cash value of funds in your personal 401(k).

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    Fredrick W Voigtmann

    Immigration Attorney
    Answered on

    The loan you described should qualify as a lawful source of EB-5 funds, assuming you have all of the documentation demonstrating that the funds deposited into your 401(k) were lawfully obtained.

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    Daniel A Zeft

    Immigration Attorney
    Answered on

    The $50,000 must be funds that you can invest in an EB-5 project.

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    Michael A Harris, Esq

    Immigration Attorney
    Answered on

    It may be feasible, but you should consult a tax adviser. Some articles suggest taking a loan from your 401(k), which is generally allowed but very costly. The EB-5 rules require specific compliance for using proceeds from a loan. One of those core requirements are whether the loan is secured by assets that you own. The securitization process should be formally addressed and you will want to review it with an EB-5 specialist before you do anything.

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    BoBi Ahn

    Immigration Attorney
    Answered on

    That is not a problem as long as you can document the lawful source, for example a 401K. A loan from your 401K for EB-5 purposes is fine. How you structure the loan to avoid tax consequences is something you should address with your tax advisor. As long as the transaction is legal, there is no issue for EB-5 purposes.

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    Charles Foster

    Immigration Attorney
    Answered on

    Yes, you should be able to use the $50,000 loan from your 401(k) as part of your EB-5 investment amount. You would be able to establish a lawful source of funds. It would have to be withdrawn because normally upon filing your EB-5 petition on Form I-526 and the issuance of a receipt, you have to transfer the full investment amount, be it $500,000 or $1 million, into the job creating project.

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    Tomas Resendez

    Immigration Attorney
    Answered on

    A loan backed up by your own assets usually is enough for the U.S. Citizenship and Immigration Services to prove investment in EB-5 petitions, assuming that you can prove source of funds of the 401(k). You should talk to an immigration lawyer and explain your whole situation before submitting any documentation with USCIS.

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    Phuong Le

    Immigration Attorney
    Answered on

    It should be fine to use a loan from your 401K because you can show that your loan is backed by your actual equity or cash value in your 401K. It shouldn''t be too hard to put together the required supporting documents for this part of your source of funds, as part of your I-526 petition.

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    Belma Chinchoy

    Immigration Attorney
    Answered on

    It is worth exploring whether your retirement would count as a collateral. This needs research.

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    Blake Harrison

    Immigration Attorney
    Answered on

    Loans are permissible under EB-5 regulations as long as they are secured by the personal property of the investor. In this instance, the loan would be secured by the contributions made to your 401(k) account.

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    Lynne Feldman

    Immigration Attorney
    Answered on

    Seek tax advice.

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    Jinhee Wilde

    Immigration Attorney
    Answered on

    The loan is acceptable fund source as long as it is secured by an asset you own.

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