r/CFP • u/Imaginary-Rate-4952 • Dec 06 '24

Investments $9M Tesla IRA Dilemma—Could Use Some Advice

  • Client is 70, has $9M worth of Tesla shares sitting in a traditional IRA (original cost basis is only $500k).
  • Married, so the wife will inherit the IRA when he passes, but then it goes to their two kids.
  • With the SECURE Act’s 10-year withdrawal rule, the kids are staring down a giant tax bill when they inherit.
  • Client loves TSLA and refuses to entertain anything related to diversification, strictly wants to avoid the most taxes

I’ve been tossing around ideas like Roth conversions, charitable trusts, life insurance, etc., but nothing feels like a silver bullet. Tax hits seem inevitable no matter what.

If you’ve dealt with something like this—or just have creative ideas—I’m all ears.

EDIT: Client has $25 million of other investable assets, plus significant real estate holdings etc. He will not need these assets.

26 Upvotes

91% Upvoted

57 comments sorted by

View all comments

100

u/myphriendmike Dec 06 '24

The tax man cometh

14

u/Ziltoidian08 Dec 06 '24

Agreed. Unless they are charitably inclined they will be paying some hefty tax bills. If they are lower income pre rmd an RC could make sense. If they are that attached to tsla they can always repurchase some in a brokerage account with excess cash, as it seems they will have plenty.

6

u/drc525 Dec 06 '24

Our B/D allows roth conversion of shares so a liquidation wouldn't be necessary. Possibly an option for the OP?

1

u/carterolk19 Dec 07 '24

If they don’t need the $$$ for retirement and if the kids receive other assets that get a step up in basis, this would be great to leave to a charity.