By: Mat Sorensen
The $3.5M reconciliation package pending in Congress contains two sections that will affect anyone already invested in these assets.
The proposed $3.5 trillion budget-reconciliation package still working its way through Congress contains two provisions that will restrict IRA investments into startups, small business, and real estate LLCs. These provisions came as a surprise to the over one million IRA investors who already invest a portion of their IRA into these non-publicly traded assets. The problematic sections, 138312 and 138314, change more than 40 years of IRA laws and practice, which have allowed IRAs to invest into publicly traded companies as well as privately held small businesses, LLCs, real estate and startups.
The two problematic sections are not to be confused with IRA provisions in the bill that are targeting large accounts and high-income earners. These targeted provisions include a $10 million cap on total retirement account balances as well as sections that close out the so-called “back door Roth IRA” for high-income earners. Those sections seem intentionally targeted and will land on what Speaker of the House Nancy Pelosi has called the “wealthy few”.
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