Regarding Section 138312 of the House Ways and Means summary for the FY2022 Budget Resolution
Dear Senator/Congressman/Congresswoman __________,
Thank you for your contributions and political leadership in our community and our state.

I wish to bring your attention to proposed changes in retirement plan rules that will harm average investors like me.  The stated objective for changes to Individual Retirement Accounts is to curtail the use of these tools by the wealthy for tax avoidance.  That makes sense to me.

However, one proposed change will penalize me for making a legal and prudent investment with my IRA.

I am referring to section 138312 of the House Ways and Means draft changes to section 408 of the US tax code.  This new language will prevent the ability to invest in private placements that require investor accreditation.

While I qualify as accredited investor, I would not consider myself wealthy.  I still find it challenging to deal with the high costs of housing, health care, and helping my children afford college without having to take on enormous debt.  

I have chosen to invest a portion of my IRA in a non-traded REIT.  After much research I identified this REIT as a safe and secure way to generate consistent income in the 10-12% range.  

My 401(k) with my current job is entirely in the stock market.  Putting funds from an old 401(k) into this REIT seemed like a great way to diversify and protect my savings from the next market correction.  2008 hurt.  A lot.

I made this investment in 2019.  There is a 7-year minimum hold period for this REIT, which matures in 2026.

The proposed changes in section 138312 will penalize me for making what was a legal investment at the time.  

I will be forced to liquidate the REIT prior to maturity, probably at a significant discount.  If I cannot find a buyer, my CPA tells me I’ll have to take the investment out of my IRA as an early distribution.  The taxes and penalties will be devastating.  

Why?  What did I do wrong?  How is this investment strategy abusive or harmful to anyone?

This proposed rule change is unfair, unnecessary, and should not be included in the budget resolution.  I appreciate any work you can do to help educate your peers about the damage this law will inflict on law abiding citizens.

Best regards,