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Large IRAs and High-Income Retirement Savers Targeted by Amendment to Budget Reconciliation Bill

Last week, Richard Neal (D-Mass), chairman of the House Committee on Ways and Means, unveiled an amendment to help fund the $3.5 trillion budget reconciliation legislation that is currently under consideration in Congress. The Neal amendment would make dramatic changes to the rules governing retirement plans for certain high-income taxpayers by imposing new asset limitations and prohibitions. It would also require distributions and IRA contribution limitations for certain individuals with retirement savings over $10 million, require distributions of Roth balances in excess of $20 million and end the practice of so-called “back-door” Roth conversions. These changes aim to effectively prohibit mega IRAs, which were the subject of extensive press reports earlier this year following ProPublica’s revelation of multiple large IRAs, including Peter Thiel’s $5 billion mega-Roth IRA.

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Important Changes to California Rules on the Granting of Stock Options


Time to Read: 1 minutes Practices: Tax

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The California Corporations Commissioner has repealed significant regulatory restrictions on employee options and other equity grants effective July 9, 2007. The new regulations make several changes to the rules for options and compensatory grants of securities other than options, including to:

  • Repeal the prohibition on performance-based vesting or time-based vesting that is not as rapid as 20 percent per year for five years for employees other than managers or officers.
  • Repeal the requirement that the exercise price or purchase price not be less than 85 percent of fair value (or 100 percent for a more-than 10 percent owner).
  • Facilitate the extension of plans adopted earlier and then extended to California residents by allowing shareholder approval to occur within 12 months of the issuance of options to California residents. In addition, foreign private issuers may make grants to up to 35 persons without obtaining shareholder approval.
  • For plans subject to Rule 701, adopt the federal rules on financial disclosure.

For additional information, please call a member of our Tax & Benefits Department.

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