I am working in the U.S. with a work visa. I have $250,000 in my bank account and another $250,000 in my 401(K) account. How can I use the money in the 401(K) to invest in EB-5? What documents do I need?
Yes, you can use the money in your 401(k) to invest in EB-5.
Your EB-5 investment can be derived from lawful sources such as your 401(K). You will have to show how you accumulated your funds to deposit into the 401(K).
If you can take the money out, you can use it. This is presumably lawfully earned money. We would need your tax returns and income statements.
Shouldn't be difficult. If you earned U.S. wages and paid U.S. taxes (especially with paystubs) that may be all you need.
Documents showing the withdrawal from your 401(K) to your bank account.
You'd have to cash out and commit those funds to the EB-5 investment.
You could use your 401(k) funds by withdrawing same, with certain adverse tax consequences.
In general, when you make a withdrawal from your 401(K) before you are eligible to do so, you will be subject to a 10% early withdrawal penalty by the IRS. Taxes will also be due on the withdrawn funds because these funds accumulate on a pre-tax basis. If you are older than 59.5 years, then you can make the withdrawal without penalty, but taxes will still be due. In your particular situation, if all you currently have is $ 250,000 in the bank as cash and another $250,000 in your 401(K) account, even if you are able to access those funds without penalty you would still not be able to afford the EB-5 investment, due to the taxes you need to pay on the funds you withdraw from your 401(K) account. If you have real estate, you could borrow money against it on a collateralized basis. Many applicants make up the shortfall in their funds through this method. Alternatively, if you have a close relative who would be willing to gift you the funds required to round up the investment, that could also be OK.
You can use your 401(K) money to apply for the EB-5 visa. Consult with your immigration lawyer to discuss the best way to accomplish your goal.
Your 401(K) is a valid provable source of funds. The issue you face is if you are not over 59.5 you will have tax liability and a 10% penalty on funds you withdraw. It you are over 59.5 you will have immediate tax liability. I would suggest you consult with your CPA and investment immigration attorney immediately. Time is very limited. Take action.
If you withdraw those funds from your 401(K), you can use them to invest.
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