CNBC: House Democrats’ plan would prohibit individual retirement accounts from holding private equity, hedge funds

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By: Greg Iacurci

KEY POINTS

  • House Democrats proposed a tax package that would prohibit individual retirement accounts from holding private equity, hedge funds and other investments for “accredited investors.”
  • These investments have requirements to partake, pegged to income, net worth or other measures.
  • Proponents think the plan reduces IRAs’ use as a tax shelter and has investor protection benefits, while others think it may unfairly subject some high and middle earners to penalties.

A tax package unveiled by House Democrats would forbid individual retirement accounts from holding certain private investments typically reserved for the wealthy.

While proponents think the proposal would raise investor protection and reduce the use of an IRA as a tax shelter for the rich, critics think it could lead to a big financial hit for some investors — even some everyday savers.

The House legislation, unveiled last week, would prevent IRAs from holding investments offered to “accredited investors.”

Read the full story here.

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