IRA day Trading

Here's the way E-trade explained allowable trading in an IRA: If you buy stock ABC and then turn around and sell ABC (either the same day or before the 3 day settlement period), the funds are available to you immediately for re-investment. Here's where it gets a bit confusing: Let's say you buy ABC in the morning and sell it in the afternoon. That same afternoon you buy XYZ (with funds from the sale of ABC) and then let's say the next day XYZ tanks on poor earnings and you sell (or are stopped out) on XYZ. Your account is automatically put into a 90 day restriction. The reason being is that you sold XYZ BEFORE ABC settled.

I know it works this way since the above happened to me. I now wait for the 3 day settlement period BEFORE buying other stock with funds from the first transaction.

Hope this helps. Not sure how other brokers allow trading in an IRA but my guess is that it is the same or similar.
 
and u can definitely trade futures in an IRA. i do it frequently

you cannot short STOCK, but u can short futures, and of course buy puts

you cannot sell a naked option in an IRA
 
According to some articles re trading rules for IRA, you could easily lose your status of tax-differed for IRA if the IRA Account is traded too often. The IRS would just deny the defferal and have your profits (hopefully) taxed the year they ocurred. To be investigated.
 
i read something similar to that ACM. are u aware if it has ever been applied to a taxpayer? i am wondering if it is overly conservative accountants/tax attorneys worries, or if there is case law behind it?
 
Tax problem with daytrading futures in Roth IRA?

http://www.elitetrader.com/vb/showthread.php?threadid=55998


Do you owe taxes if you day trade your IRA?

http://www.greencompany.com/Traders/TraderRetirement.shtml

Many traders are interested in actively trading their IRA accounts, even though they can’t use margin to buy stocks.

Some traders will enter and exit trades on a daily basis, similar to how they operate their day trading business in “taxable” accounts.

This raises an important question of great concern to many traders. Will the IRS consider day or swing trading in an IRA account a camouflaged “profit-producing” activity that is subject to UBIT?

Many traders may not mind paying taxes on their day trading gains in their IRA account, since they would have to pay similar taxes anyway in a taxable account. Their goal may be to tap additional sources of trading capital and they don’t mind losing the tax-deferral benefits. If a trader stops trading, then the future profit growth is tax-deferred in the IRA account.
 
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