The (proposed) Death of your SDIRA

[Ari Newman]

For those of you who haven't already heard the news, there is SDIRA-Killing Legislation in the House Tax Bill. Tax Attorney/Investor John Hyre, has put together a website that describes the impact of this bill on all of us. Please take action: Go to handsoffmyira DOT com to see how you can fight this awful law. Please spread the word about the website, far & wide. More than once, people need to be reminded.

Ari

[John Hyre]

Under the bill, an IRA cannot own 10% or more of a corporation, partnership, trust, estate, or "other unincorporated enterprise". That probably means Single Member LLCs as well. Now, one can gamble and say "I think unincorporated enterprise does not mean SMLLC's". Of course, if you are wrong (likely), your IRA dies. Who wants to roll those dice?

PS: It certainly kills 50/50 JV's between an IRA and a "sweat equity guy", to name just one example of the many, many deals this legislation would ban. The IRA cannot own 10% or more of ANYTHING. And is banned from PPM's, etc. that require accredited investors, etc.

Also banned:  Anything in which the owner is an officer or director, which includes CBLLC's.  Note:  Putting a "strawman" as the officer or director (or manager or trustee, same thing) does not "get around" the problem.  The IRS looks at the substance and would ask "do you exercise the power of officer or director"; if one exercises such power, they are an "officer or director", regardless of what the paperwork says.

That this is "just in the House and has not passed yet" is no reason for complacency.  It'll be harder to stop the further down the line it gets.  It would ban better than half of SDIRA investing.  And you better believe that if they get away with it 401k's will be next.  

It's time Make Some Noise and not just let it happen.