Do you own an individual retirement account (IRA)?
Recently, there has been proposed legislation from Congress detailing a number of tax law changes. One of the areas of focus that could potentially become law centers around not being able to use an IRA to make certain investments. If enacted into law, these changes will have a direct negative impact on your ability to diversify your investment options with your IRA.
Here’s what’s possibly at stake for your retirement account
1. You would no longer be allowed to use your IRA to invest in private equity, real estate, debt securities, cryptocurrency and any other investments that require the IRA sponsor to meet specific minimum financial, education, or other licensing agreements.
Under the current proposed legislation, you could be forced to divest all of your IRA holding private securities before they are eligible for withdrawals within two years., There could be large tax penalties for not complying, but the specifics are not known yet. If passed, the tax law change would most likely apply starting in 2022.
2. Additionally, this new law prohibits your IRA from investing in non-publicly traded assets in which you and related individuals—including the IRA itself—own more than a combined 10% interest. Or if you’re an officer or a director of any of the assets you oversee, regardless of percentage, your IRA would be prohibited from investing in those assets.
For example, if you are a director of a private partnership or corporation, you cannot hold any amount of investment of that asset within your IRA.
Are you interested in voicing your opinion against this legislation?
The best way to make your voice heard is if you contact your representative in the House and Senate. If you feel that these proposed details in the current legislation are harmful to you personally, you can look up your representatives and senators here to find their contact information.
Here are some helpful points that you can highlight in your message to Congress:
- Sections 138312 and 138314 as proposed impact your ability to save for a secure retirement. It limits your ability and choice to diversify your IRA portfolio outside of the stock market.
- There could be severe financial consequences to you. This bill could make you divest, requiring you to sell your investments at a depressed rate, including being hit with the tax consequences of withdrawing your distributions early. However, this is currently speculation, as the specifics of this program are unknown.
- This bill could negatively impact small businesses that rely on private funding to grow and operate.
Sample letter example
SAVE MY IRA – Sections 138312 and 138314 within the Reconciliation Tax Bill would be disastrous to my retirement savings and I am asking that you work on my behalf to get them removed entirely from the proposed bill. These two IRA provisions could take away investment choices that are important to growing my IRA to an amount I can retire on. Please help protect the retirement I have been working so hard to achieve.
Click Here to take action and contact your U.S. Congressional representatives today.
As the Wealth Development Company, we are a leading U.S. sponsor with approximately $500 million in assets under development and management. These investments are comprised of alternative investments, which include private funds and syndications, externally managed real estate investment trusts (REITs) as well as public funds. We conduct substantially all business through our Sponsor, CaliberCos Inc., a vertically integrated platform that is strengthened by more than 70 professionals with decades of institutional experience in commercial real estate, capital markets, alternative investments, and mergers and acquisitions.
We allocate our alternative investment strategies and align them with investors’ investment objectives, risk profiles and liquidity preferences to offer an optimal balance of risk-adjusted returns and attractive investment performance. It is because of this thoughtful, intentional approach, and our unwavering pursuit of performance, that we have been deemed The Wealth Development Company.
We strive to build wealth for investors by offering a diverse host of investment solutions that fit our investors’ needs. With a primary focus on key middle-market growth areas, such as Arizona, Colorado, Nevada, Texas, Utah and Alaska, we evaluate other U.S. markets that possess the same attractive demographics and macroeconomic trends as our targeted markets, such as highly skilled labor, emerging population and job growth. In addition, we utilize our institutional full-service operating platform to generate operating efficiencies while enhancing the value of our investments through dedicated asset management strategies.
We create value through a combination of internal and external growth channels. Bringing together the benefits of real estate, deep asset-class, and capital markets expertise across public and private investments. We seed, develop, and manage a broad range of liquid and illiquid alternative strategies for a diverse group of investors who comprise approximately a $4 trillion alternative investment market, which includes high net worth, accredited and qualified investors, as well as family offices and smaller institutions. This strategy allows us to opportunistically compete in an evolving middle-market arena for alternative investments that range between $5 million and $50 million.
Click here to see Caliber’s current property portfolio.
If you would like to speak to someone about diversifying your retirement accounts, contact us at [email protected] or call (480) 295-7600 to schedule a call with a member of our Wealth Development Team.