Note Funds and SDIRAs

[Daria B.]

Thoughts on this….

This article was sent to me from my CPA after I asked a question about my current note investing and investments I am seeking to get in on, which includes anything from individual purchases with a JV to accredited investing with a fund company.

https://www.cnbc.com/2021/09/1...

My SDIRA also sent me this email regarding the proposed tax law on using IRAs for these investments.

How does the proposed legislation affect me?

The proposed legislation would prohibit IRAs from holding privately-placed equity and debt securities and other investments that require the IRA owner to meet certain minimum financial, educational or licensing requirements. For example, the legislation would prohibit IRAs from holding unregistered investments that are offered to accredited investors, like equity or debt investments in small businesses or investments in private funds. You may very well hold investments in your IRA today that would be prohibited by the proposed legislation.

The bill would also prohibit IRA owners from investing in (1) non-publicly traded entities in which the IRA owner and related entities (including the IRA itself) own more than a 10% interest or (2) any entity in which the IRA owner is an officer or director, regardless of ownership percentage. By way of example, single-member limited liability companies or any investment in an entity in which an individual is a director or officer could no longer be held in an IRA.

IRAs holding any of the above investments would lose all of the tax advantages previously available to the IRA.

[Brian Eastman]

@Daria B.

#1 - Do not panic and alter existing investments.  There will be 2 years to make adjustments if this becomes law.

#2 - ACT NOW.  TODAY.  To stop this from becoming law.  

See the following article for resources to help inform legislators why these proposals need to be eliminated from the budget bill.

Self-Directed IRAs at Risk - Your Advocacy Is Needed