Peter Thiel has entered the chat.
Self directed IRAs under attack in proposed tax bill
141–150 of 306 posts
Re: Self directed IRAs under attack in proposed tax bill
#142Earlier quoted context omitted.
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.
If that was true then they could simply cap the amount that was exempt from taxation.
Re: Self directed IRAs under attack in proposed tax bill
#143Earlier quoted context omitted.
The modern 401k laws are a giveaway to the financial industry. They stipulate extraordinary restrictions on what investors can/must _invest_ in and fundamentally transfer tremendous economic power and influence to “advisors” and the financiers attached to them.
The popularization of 401(k) plans (as well as 529 college savings plans, etc) got Main Street on the same page as Wall Street. My parents couldn't have cared less if the stock market tanked. Dad's retirement was a traditional pension, and their savings was in a money market account. Now if the stock market tanks, I watch my retirement account and the kid's college savings plan tank with it. Now that so many of us ar…
The alternative perspective on that is that "Main Street" got to collect its interest payments from the local Savings & Loan or from US Government Savings Bonds while Wall Street did whatever fancy stuff it did with exotic investments like equities--which were mostly gated by expensive full-service brokers and other financial people.
Re: Self directed IRAs under attack in proposed tax bill
#144I'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 just isn't true. The bill also prevents you from investing in any private company of which you are a member, AKA a startup you work at. It also prevents you from any deals requiring you to be an accredited investor which means any Reg D which is how almost all early stage tech companies raise money.
Re: Self directed IRAs under attack in proposed tax bill
#145Earlier quoted context omitted.
Because he feels that it's wrong that he made a lot of money doing something that other middle income earners could reasonably do, but now the ladder is getting pulled up behind him? This is no skin off the back of the wealthy. They'll find another trick and life will go on. For those of them that actually care about "normal" Americans being able to do the same thing they did, it feels a little wrong that it requires…
> This is no skin off the back of the wealthy it is overly simplistic in USA - real people lose their "wealthy" status every day. You think a "wealthy" restaurant or bar owner is having a good day in 2021? this class-baiting comes from the previous century, and IMO detracts from real problems right now
"Wealthy" in the context of most of the discussion surrounding this change are those with millions or billions in Roth IRAs. Those people's accountants will figure out a new strategy where they might have to pay a negligible amount in tax (if any at all). This change will be a few weeks of headache before it's largely forgotten. The only thing this will do for a struggling restaurant or bar owner in 2021 is ensure that they can't use money from their IRA to support their business.
I don't entirely understand what you're construing as class baiting. You don't have to have any contempt for the incredibly wealthy to acknowledge that they're going to walk away from this with extremely minimal losses, while your average person with a Roth IRA account won't be able to use it for starting or supporting their own business.
Re: Self directed IRAs under attack in proposed tax bill
#146Presumably meant to address high net worth individuals completely dodging taxation on huge gains by using their IRAs for investments like exercising early-stage stock options.[1] I kind of wish they'd go with just capping the gains, but would I still say that if I wasn't planning to use mine to "fund" high-return cryptocurrency arbitrages? 1) https://www.forbes.com/sites/sarahhansen/2021/06/24/peter-th...
I'm actually pretty fiscally conservative but I think it's ridiculous that someone abused the intent of a Roth IRA by accumulating $5 billion into it. The whole purpose of IRAs is to encourage regular people to save for retirement. It was not meant to provide billionaires tax loopholes to avoid paying millions or even billions of dollars in taxes. It's kind of like playing a game with someone. 99% of the people are f…
Congress is preventing all people from investing in private companies within retirement accounts, not just rich people. Adding the cap is fine but preventing private company investment is asinine.
Re: Self directed IRAs under attack in proposed tax bill
#147Good. Capital is under-taxed.
On the contrary, I think we're being taxed too much.
Re: Self directed IRAs under attack in proposed tax bill
#148The 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.
The income has not been taxed. Thiel purchased securities inside the Roth IRA, and they gained value. Being inside a Roth protects those gains from being taxed. Roth IRAs were not intended to allow unlimited (or even "huge") gains to remain untaxed, which is why they had a low contribution limit. What Thiel did was (and is) not illegal, but it is viewed as an abuse of the intent of a Roth IRA that (some in) Congress…
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.
Re: Self directed IRAs under attack in proposed tax bill
#149>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. Huh. So under current law, you can take your IRA money and "invest" it in a single-member LLC? Wild. Does that let you circumvent the proscription against living in properties you own through your IRA? Since in that case, the "owner" would be the LLC,…
I’ve never known anyone to own a property as an IRA holding. Is that possible??
Absolutely. You can own almost all kinds of assets in your IRA today excluding collectibles.
Re: Self directed IRAs under attack in proposed tax bill
#150I'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 just isn't true. The bill also prevents you from investing in any private company of which you are a member, AKA a startup you work at. It also prevents you from any deals requiring you to be an accredited investor which means any Reg D which is how almost all early stage tech companies raise money.
Does it restrict you from doing those things, or only restrict you from doing it in a tax-free/tax-advantaged way?