Man, someone had the knives out for Peter Thiel when they wrote this clause in:
"(7) The following categories of assets shall be exempt from all taxation under this part and also from the reporting requirements of this Section:
(A) Except as described in subparagraph (B), qualified pensions and individual retirement arrangements, including those described by Section 219(g)(5) of the Internal Revenue Code, or foreign pension arrangements similar in nature to those described in that Section and exempted from U.S. taxation by a treaty obligation of the United States;
(B) Amounts held in Roth IRA or other Roth-type retirement arrangements or any substantially similar accounts, except to the extent that the aggregate value in all such accounts in which the taxpayer holds a beneficial interest, either directly or indirectly, exceeds $10 million ($10,000,000) in present value;"
So yeah, tax advantaged accounts are not considered part of your wealth... unless you have more than 10M in your roth account. In which case, they'll gladly consider it as part of the total wealth to evaluate when considering #1 - whether you owe tax, and #2 - how much tax you owe.
If you happen to have more than 1B in assets, and were trying to move money into your Roth (which is a taxable event, btw) to reduce your required minimum distributions, AND it caused your roth to tip over the 10M mark, guess what, it just backfired.
Peter Thiel, in the meantime, already decamped for Florida. For those who don't know why this clause was written, see the ProPublica article, which used stolen IRS data to hang him in effigy:
https://www.propublica.org/art...
https://www.wsj.com/opinion/pe...
This is starting to feel like AB5 when they tried to skewer Uber and Lyft and fucked over freelancers:
https://pacificlegal.org/calif...
And then Uber and Lyft just opened up their wallets and got themselves an exemption.
https://fedsoc.org/scdw/califo...
The prime mover behind that law:
https://thecoastnews.com/comme...
"Exemplifying Sacramentoâ(TM)s incestuous relationship with Big Labor, Gonzalez has since left her District 80 Assembly seat last year to become head of the California Labor Federation.
According to the court, the exemptions, which pick winners and losers, explicitly exclude Uber et al. even though similarly situated app platforms like Wag! and TaskRabbit received exemptions for such workers as dog walkers and yard cleaners.
In trying to defend Gonzalezâ(TM)s poorly drafted law during oral arguments on July 13, 2022, the stateâ(TM)s deputy attorney general withered under questioning from the three-judge panel. It was notable, the court wrote, that counsel for the state was âoeunable to articulate a conceivable rationale for AB 5 that explains the exemptions made by AB 5, as amended.â"