Palantir Technologies (NYSE: PLTR), PayPal Holdings (NASDAQ: PYPL) – Palantir, the $ 5 billion retirement piggy bank of Paypal co-founder Peter Thiel faces a hammer from lawmakers
Palantir Technologies Inc (NYSE: PLTR) and Paypal Holdings Inc (NASDAQ: PYPL) co-founder Pierre Thiel could be forced to withdraw billions from his Roth IRA account if the House passed a tax law that would have authorized a key committee.
What happened: Thiel could be forced to withdraw anything but $ 20 million from his Roth IRA after House Democrats revealed that a tax package that would force the distribution of individual retirement accounts, 401 (k) plans and other retirement glitches is over $ 10 million, CNBC reported.
See also: What are the IRA contribution limits
Palantir co-founder would be liable for income tax on growth of his investments, says accountant and IRA expert Ed Slott.
Under the proposed law, shareholders must withdraw 50% of accounts valued over $ 10 million, while larger accounts over $ 20 million must withdraw 100%, CNBC reported.
Single taxpayers with less than $ 400,000 in income and married couples with less than $ 450,000 would be exempt from the proposed rules.
Robert keebler, accountant and estate planner, said that if Thiel was “really smart and could get his [adjusted gross income] below the threshold, it will completely avoid this new rule.
Why is this important: In June, ProPublica reported that Thiel’s Roth IRA account had grown from less than $ 2,000 to $ 5 billion in 2019.
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Contributions to the Roth IRA account are taxed in advance, but the investment income is tax-free, which means that if Thiel withdraws his funds after he turns 59 and a half, he will not owe any tax. .
According to ProRepublica surveys, others who have huge sums hidden in Roth IRA accounts include Berkshire Hathaway Inc (NYSE: BRK-A) (NYSE: BRK-B) CEO Warren Buffett and his deputy Ted Weschler, and World Capital Alden the head of financing Randall Smith.
Weschler said in a statement: “Although I have been a huge beneficiary of the IRA mechanism, I personally don’t think the tax shield my IRA offers me is necessarily good tax policy,” according to ProRepublica.
According to the Bloomberg Billionaire’s Index, Peter Thiel’s net worth stood at $ 7.54 billion at the time of publication. He is ranked at No.353 on the list and has seen his wealth increase by $ 900 million so far this year.
Professor at Berkeley and former Secretary of Labor Robert reich said on Twitter Sunday that “billionaires are not the answer,” noting that Tesla Inc (NASDAQ: TSLA) CEO Elon musk paid $ 0 in federal income tax in 2018.
Reminder: Elon Musk paid $ 0 federal income tax in 2018.
Billionaires are not the answer.
– Robert Reich (@RBReich) September 19, 2021
At the height of the COVID-19 pandemic in mid-March last year, billionaires in the United States added $ 1 trillion to their wealth.
Read more : The “Gateway IRA” is not your parents’ self-directed IRA. A new way to invest in real estate
Photo: Courtesy of Dan Taylor via Wikimedia
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