Roth IRA's are post-tax, that's the whole point of them. You put money in after paying tax and then you're done, when you withdraw for retirement it's tax free.
If this bill passes as written he would actually be forced to divest assets out of his Roth IRA and then pay taxes on them now. It's a really substantive change, hence the discussion.
> If this bill passes as written he would actually be forced to divest assets out of his Roth IRA and then pay taxes on them now.
He would be forced to sell his current assets in the IRA, yes—but what prevents him from rolling over the proceeds into another asset? As long as all the funds remain in a Roth IRA until retirement age there shouldn't be any taxes due to the reinvestment, now or later.
Or are you implying that he would choose to take the tax hit of losing the Roth status rather than sell the assets?
You're right that I mixed up pre and post but that's exactly the point. It's post tax so he's ALREADY PAID TAXs and therefor will pay nothing when the funds are distributed.
If Peter Thiel had contributed the maximum possible with a mega backdoor Roth for every year of his life, that would total roughly $2 million, so Thiel has at least $4.998 billion in untaxed capital gains in his account.
If this passes, it wouldn't go back and make him pay taxes on those, but it would stop other people from replicating that trick and it would greatly reduce the amount of future untaxed capital gains he will get.
Roth IRA's are post-tax, that's the whole point of them. You put money in after paying tax and then you're done, when you withdraw for retirement it's tax free.
If this bill passes as written he would actually be forced to divest assets out of his Roth IRA and then pay taxes on them now. It's a really substantive change, hence the discussion.