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Self directed IRAs under attack in proposed tax bill

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Re: Self directed IRAs under attack in proposed tax bill

#181

Post by lmeyerov »

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…

The big thing I heard about is this ends QSBS, which stinks for founders: something like 15-20%+ of your company's value. Worse, it's a retroactive tax, meaning taxing founders who started the journey with that in mind.

Talk about rich senators punching down vs encouraging company formation!

PSA: If you are starting a US company and haven't heard of QSBS.. look into it at the federal + state levels, as that's a good chunk of your potential net worth.

Re: Self directed IRAs under attack in proposed tax bill

#183

Post by the_optimist »

PaulDavisThe1st wrote: post #165
the_optimist wrote: post #148

Earlier quoted context omitted.

This is just flat wrong. The income contributed to a Roth IRA is post-tax. It is a retirement account that is economically equivalent to a 401k. The only differences are 1) timing on when the gains are taxed and 2) whether you can self-direct it or not. Saying “not intended to allow” is simply nonsense that covers for the abusive 401k system that fleeces individuals at the benefit of the finance industry.

Also, I don't know the full scope of 401k's but the one I have is absolutely not post-tax and is equivalent to a traditional IRA, not a Roth.

You’re missing the point. In all accounts you are either taxed now or later. The exact same amount of $ value in incremental capital gains are untaxed in all qualified accounts, by design and intent.

Re: Self directed IRAs under attack in proposed tax bill

#184

Post by UncleMeat »

the_optimist wrote: post #157
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.

You’re wrong and confusing people here. Roth’s are post-tax at investment, not taxed later. Traditional and 401k are pre-tax at investment, taxed on distribution. Economically equivalent.

There are Roth 401ks.

Re: Self directed IRAs under attack in proposed tax bill

#185

Post by ClumsyPilot »

benmw333 wrote: post #123
colinmhayes wrote: post #115

Earlier quoted context omitted.

You can move to a different country if you disagree with the voters of this one.

Democracy is tyranny. Voting is for children. Contractual representation is an acceptable solution.

>"Democracy is tyranny"

War is peace. Freedom is slavery. Ignorance is strength.

Re: Self directed IRAs under attack in proposed tax bill

#186

Post by difu_disciple »

loourr wrote: post #152
darkerside wrote: post #30

The whole article is predicated on the lie that low and middle income earners are buying private placements and LLCs in their IRAs. They are not. Full stop.

That's false. I know for a fact that tens of thousands of middle class people are doing this today.

definitions of middle class are very fluid here.

Re: Self directed IRAs under attack in proposed tax bill

#187

Post by kodah »

anamexis wrote: post #153
idiotsecant wrote: post #133

Earlier quoted context omitted.

This is the killer, indeed. Checkbook IRAs are amazing retirement tools if you're interested in using some of your retirement money in high-risk, high-reward investments. My retirement fund benefited enormously from the Q3 2020 crypto market gains, which would not have been possible without my LLC. It's hard to see this as anything other than removing all the peasants from the market so that the big dogs can have it…

I don't think too many "peasants" have LLCs so they can use their IRAs to invest in crypto.

I was thirty when I started making "real" retirement money. I suspect peasant is an exaggeration, but there's a good chunk of highly paid folks that are playing catch up to retirement or have reached retirement but still need to build their own safety nets and cushions as the cost to retire continues to go up, even when retired.

Re: Self directed IRAs under attack in proposed tax bill

#188

Post by reedjosh »

ralph84 wrote: post #92
czbond wrote: post #43

Earlier quoted context omitted.

What I like about Congress - is instead of saying "this provision can allow you to do well for retirement by investing in private companies self directed with an IRA and you might not need social security". Instead they act: "we're not rich, we're mad at the few who are - so instead of teaching you how to do this, we're going to make it illegal"

More like: “we’re paid very well to represent the interests of the elite. The elite don’t like upstarts trying to join them via wealth accumulation so we design a tax code that makes accumulating significant wealth via working and saving impossible.”

This.

Re: Self directed IRAs under attack in proposed tax bill

#189

Post by toomuchtodo »

idiotsecant wrote: post #133
mmd45 wrote: post #88

Earlier quoted context omitted.

The killer is the "The bill also prevents investing in an entity in which the IRA owner is an officer." which is generally how the checkbook IRA is structured (IRA owner is the Manager of the single member LLC that is wholly owned by the IRA). Sec. 138314. Prohibition of Investment of IRA Assets in Entities in Which the Owner Has a Substantial Interest. To prevent self-dealing, under current law prohibited transactio…

This is the killer, indeed. Checkbook IRAs are amazing retirement tools if you're interested in using some of your retirement money in high-risk, high-reward investments. My retirement fund benefited enormously from the Q3 2020 crypto market gains, which would not have been possible without my LLC. It's hard to see this as anything other than removing all the peasants from the market so that the big dogs can have it…

> My retirement fund benefited enormously from the Q3 2020 crypto market gains, which would not have been possible without my LLC.

We probably shouldn't encourage the general public to gamble their retirement funds in a casino. I understand many believe this is an "asset class", but there is ample evidence crypto has no place in someone's retirement asset mix. Such investment in a taxable account is reasonable compromise.

Re: Self directed IRAs under attack in proposed tax bill

#190

Post by the_optimist »

colinmhayes wrote: post #34
the_optimist wrote: post #15

The income has already been taxed. The economics are identical to other qualified retirement plans. This is simply more about restricting freedoms and making excuses for targeting Peter Thiel personally.

Restricting the freedom to dodge taxes...

Same exact $ amount as in a 401(k). This is only about power and control.
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