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Self directed IRAs under attack in proposed tax bill

advantaira.com

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Re: Self directed IRAs under attack in proposed tax bill

#111

Post by CincinnatiMan »

mariojv wrote: post #73

I'd recommend reading the proposed provisions themselves directly from the Ways & Means Committee instead of the main article urging action: https://www.advantaira.com/wp-content/uploads/2021/09/WM-Tax... Highlights: 1. You can't add new contributions to tax-advantaged accounts if their total value exceeds $10 million and you make over $400K for single filers, amounts indexed to inflation. 2. There are required minim…

I think you may be wrong on point 3.

> Furthermore, this section prohibits all employee after-tax contributions in qualified plans and prohibits after-tax IRA contributions from being converted to Roth regardless of income level, effective for distributions, transfers, and contributions made after December 31, 2021.

This makes it sound like backdoor will be stopped for everyone, since after-tax contributions to a (Traditional) IRA are a necessary step.

Re: Self directed IRAs under attack in proposed tax bill

#112

Post by gedy »

xcskier56 wrote: post #54

> Under these provisions, you would no longer be allowed to invest your IRA into private placements and single-member LLCs, regardless of your level of income or wealth. > This will result in significant tax consequences for many people, including low and middle-income investors. BS! In order to legally invest in private placements, you must be a "accredited investor" which means you earn over $200k individually or $…

That's certainly middle class lifestyle in many states in the US if you have a family with kids and have never had a windfall from parents, inheritance, startup luck, etc. Trying to figure out retirement on top of that is a challenge.

Re: Self directed IRAs under attack in proposed tax bill

#113

Post by colinmhayes »

wonderwonder wrote: post #100
ejstronge wrote: post #45

Earlier quoted context omitted.

> The income has already been taxed This is not true - traditional IRA contributions are made pre-tax.

Not in the US. IRA contributions are post tax. 401k contributions are pre-tax. Depending on where you live this may be semantics as they may be the same program with different names.

This is wrong. Both 401k and Ira have roth variants which are post tax. The normal variants are pre-tax.

Re: Self directed IRAs under attack in proposed tax bill

#114

Post by PaulDavisThe1st »

wonderwonder wrote: post #97
cortesoft wrote: post #62

Earlier quoted context omitted.

Why shouldn't you pay taxes on profits made speculating?

Is not all investment speculating? Very few investment classes provide 100% guaranteed returns.

You pay capital gains taxes on the majority of gains made via investment.

This change is intended to prevent the abuse of Roth IRAs as a way to shield potentially enormous capital gains from taxation.

Re: Self directed IRAs under attack in proposed tax bill

#116

Post by ghaff »

newhotelowner wrote: post #77
czbond wrote: post #50

Earlier quoted context omitted.

Does the fact that more rich do it mean it's wrong? Or that low and middle income should use it as a model and the practice should be encouraged? I mean, if private citizens can build themselves up without being beholden to social security and Wall Street - why is this bad? What if - instead of the government keeping us to the lowest common denominator (social security) they encourage, educate, and allow everyone to…

> Or that low and middle income should use it as a model and the practice should be encouraged? Problem with the low/middle income is that where to begin? Rich people hire lawyers to do the work. Low/middle income like myself knows this is available but can't utilize it as we don't know where to start, how to do it, who to contact and can't afford to hire a lawyer.

I'm not sure it's so much about not knowing where to start as it is that complex strategies that require lawyers and accountants above and beyond routine tax filings quickly start costing more than any potential tax savings unless there's a lot of money involved.

Re: Self directed IRAs under attack in proposed tax bill

#117

Post by notyourday »

cortesoft wrote: post #62
JohnJamesRambo wrote: post #16

I really hope this doesn’t go away. My self directed IRA in Bitcoin has led me to prosperity. There was no other way to do it with my retirement funds really.

Why shouldn't you pay taxes on profits made speculating?

The taxes are paid during the distribution. No distribution means no tax liability.

Re: Self directed IRAs under attack in proposed tax bill

#118

Post by benmw333 »

moate wrote: post #110
benmw333 wrote: post #41

Earlier quoted context omitted.

... taxation is theft.

No, it's payment for goods and services. If you want to live in a stateless utopia, you don't get any of the benefits of the state. That's the social contract.

"Social contract" is the cry of the authoritarian. You do not speak for me. No other person does, unless I hire them. An acceptable solution would be contractual representation.

Re: Self directed IRAs under attack in proposed tax bill

#119

Post by [deleted] »

c54 wrote: post #94
mariojv wrote: post #73

I'd recommend reading the proposed provisions themselves directly from the Ways & Means Committee instead of the main article urging action: https://www.advantaira.com/wp-content/uploads/2021/09/WM-Tax... Highlights: 1. You can't add new contributions to tax-advantaged accounts if their total value exceeds $10 million and you make over $400K for single filers, amounts indexed to inflation. 2. There are required minim…

This seems… fine? And a lot less FUD-y than the original article. I find that talk of the “freedoms” being taken away often is propaganda by the corporate interest youre paying to exercise the supposed freedom

[deleted]

Re: Self directed IRAs under attack in proposed tax bill

#120

Post by cma »

mikeyouse wrote: post #46
tims33 wrote: post #32

Earlier quoted context omitted.

Assume this is meant to capture the Mitt Romney scenario. https://www.theatlantic.com/politics/archive/2012/09/whats-r...

More recently, ProPublica showed that Peter Thiel (and others) did the same thing. Thiel amassed $5 Billion into an IRA that's nominally capped at $6k/year in contributions. https://www.propublica.org/article/lord-of-the-roths-how-tec...

Did he use the mega-backdoor contribution thing, or did he grow it from a tiny amount?
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