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On September 13, 2021, the House Ways and Means Committee released additional tax proposals in its budget reconciliation legislation that is being considered by Congress. There are many steps to the process before any legislation becomes law, but, if enacted, the proposals present significant changes to the laws governing IRAs, including what types of assets can be invested within an IRA, as well as added restrictions and limitations. You can find the proposed text here.
Some, but not all of the provisions that could significantly impact clients holding IRAs, advisors and investment sponsors are as follows:
For example, the legislation would prohibit IRAs from holding unregistered investments that are offered to accredited investors, such as equity investments in small businesses.
****Both of these provisions preclude investments that exist in IRAs at the time of enactment would be required to be “transitioned” from the IRA by December 31, 2023, meaning that IRA owners would need to sell, liquidate or distribute in-kind from their IRA by no later than December 31, 2023.
What Are We Doing?
Since the rollout of these amendments, Equity Trust has taken a proactive role in building a coalition with others in the retirement industry, retaining counsel in Washington to ensure that the lawmakers understand the serious and unintended consequences of these amendments on our clients. We will continue to work with lawmakers to ensure that they understand the harmful effects that these changes will have on the ordinary investor. Know that, as always, we will continue to be a strong advocate of investor choice. We also want you to feel secure in knowing that Equity Trust Company is well-positioned to continue to succeed, no matter the outcome of the proposed legislation.
We will continue to monitor the proposed legislation and update this website as these proposals make their way through the process. Please continue to check back for updates.
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