Reply to Who has the most in their ROTH

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]+1 I think the winner’s hat goes to Peter Thiel with a Roth worth over $5B. All tax free. He’s now a kiwi citizen. Per the Pro Republica income tax leaks, he started by contributing legitimately the minimum ($2000) to a Roth back in the 90s when he was working for PayPal as a founder. However the rub is that he bought PayPal founders shares with that contribution and these shares were significantly undervalued at something like $0.0001. These founders shares were not available to the public.  So he was able to buy ten of thousands of PayPal shares for just $2000. He did the same thing the following year and then stopped contributing to his Roth.The rest is history. PayPal grew significantly and eventually was bought by eBay for billions. Thiel then took the tax-free earnings and made a $500K angel investment into FaceBook in its early days before it went public. All done within his Roth IRA. Then FB went public and the rest is history

Ted Weschler, one of Warren Buffett’s deputies , has a Roth worth over $264M (in 2021). This was made public via the pro republics tax return leaks as well. He did it legitimately using his brain and all publicly available investments that anyone could have invested in. He converted his regular IRA to a Roth and paid over $32M in taxes. And the Roth just continued to grow.

Bottom line, the Roth IRA is a powerful retirement vehicle if you invest wisely inside the vehicle. Uncle Sam can’t touch the earnings or tax the withdrawals.[/quote]

Yes and if there was any sense of justice or logic, Congress would have capped the untaxed portion at say $15 million. The machinations of those like Thiel and Weschler are good examples of how the ultra-rich use the vagaries of the tax system to make billions, without contributing to the public systems that helped make their investments safe and possible. It's obscene.[/quote]

Clearly you are jealous/envious. How is there no justice? When both Thiel and Weschler started out they put the maximum into their IRAs/Roth IRA just like you could have done. They used their own money and made good investments. You could have done the same thing with other investments. Besides, you wouldn’t even know about these accounts if some left-leaning employee with an agenda at the IRS hadn’t broken the law and leaked them to the press. These guys did nothing wrong. They just used their brain and made intelligent investments with obviously some luck.

Your kind of liberal socialist posts are annoying. It comes across like “how dare someone else have success following the rules. Let’s change the  rules.” [/quote]

Ah yes who among us hasn't had the opportunity to purchase shares at 1000x below their fair market value?[/quote]

[b]How did you determine fair market value for his founder shares when PayPal was just a start up at the time? [/b]In fact, hoe do you determine fair market value for many other assets such as an art or sports collection, homes, business, cars, jewelry, etc? It’s very subjective.[/quote]

This is done all the time. Platforms like equityzen allow you to buy pre-ipo shares that don't really have an open market. As long as he's not the only person to have gotten that price it should be fine. All of these transactions have a paper trail that can be verified and litigated if necessary and the government won't hesitate to do that, Democrat or Republican, if there's any wrongdoing.

The issue here is the congress not anticipating this type of 'sheltering'. They should have established a cap and I believe they tried that in 2022 (same thing they tried to get rid of mega backdoor Roth) and it got shot down. Peter Thiel is a dick but that doesn't make this illegal.[/quote]

Agreed on all points- although it probably was illegal when he severely undervalued the stocks upon the award- it's just that the IRS decided not to pursue it. And yes there was a section of the Build Back Better bill in summer 2021 to cap the values in Roth's- but yes that got stripped out:

https://www.cnbc.com/2021/11/05/billionaires-may-be-spared-big-ira-tax-bill-in-build-back-better-plan.html

And a lot of the BBB got stripped down anyway before it finally passed as the Inflation Reduction Act in summer 2022.[/quote]

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