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HW&M’s Proposal Significantly Impacts All Non-Listed Offerings


As many of you know, Congress is moving through the reconciliation process which contains several tax provisions impacting our members. One recent and unexpected addition in the House Ways & Means Committee proposal was a section relating to retirement plans. Section 138312, though intended to limit the ability of investors with very high levels of income or net worth to derive tax benefits through “mega” Roth IRAs, has significant negative unintended consequences for non-listed products including REITs, BDCs and other private offerings. Specifically, because of its income/net worth limitations (and corresponding state investor and accredited investor thresholds), it would effectively prevent the purchase of non-listed products in IRA accounts accounting for upwards of 50% of capital investments.

Sec. 138312 Text

“Prohibition of IRA Investments Conditioned on Account Holder’s Status. The bill prohibits an IRA from holding any security if the issuer of the security requires the IRA owner to have certain minimum level of assets or income, or have completed a minimum level of education or obtained a specific license or credential. For example, the legislation prohibits IRAs from holding investments which are offered to accredited investors because those investments are securities that have not been registered under federal securities laws. IRAs holding such investments would lose their IRA status. This section generally takes effect for tax years beginning after December 31, 2021, but there is a 2-year transition period for IRAs already holding these investments.”

For your reference, attached is a the IPA and three other trade groups submitted to House Ways & Means Committee Chairman Richard Neal (D-MA) yesterday. Also attached is the HW&M and a .

Tomorrow, Friday September 17th at 2pm EDT we are hosting an all-member call to brief membership on the immediacy of the issue and our advocacy strategy. We strongly encourage you to attend and share the call information with those within your firm that are impacted.



Thank you in advance for understanding the urgency of this issue and joining the call. We will need to your proactive engagement in support of our advocacy efforts.


Tony Chereso
President and CEO
Institute for Portfolio Alternatives

Anya Coverman
SVP, Government Affairs and General Counsel
Institute for Portfolio Alternatives