Trading Futures completely tax free
- Thread starter propwarrior
- Start date
bob, how much capital can one get in a Roth ? Outside of a ira/Roth conversion, but that is limited by ones income level as well. Thanks
I'm hearing the IRS is cracking down on self-directed lRA accounts. Basically saying the moment you self-direct, you're in violation, account automatically becomes a non-IRA, becomes taxable and no longer qualifies as a tax shelter. This is because short-term transactions trigger unrelated business income taxes (UBIT). IRA's like IB, TD Ameritrade, etc... apparently start out self-directed according to agreement.
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A self directed IRA is where you have a custodian like Midland that allows you to invest in anything you like: gold bars, real estate, a business, race horse, a yacht for chartering, etc. IB & TDA are not SD IRA's. Imagine if Apple was started from a SD IRA, all the income would be tax free.
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https://www.elitetrader.com/et/threads/self-directed-ira-accounts.185344/
Some expert in this thread states:
"While it is legal to trade futures and do all sorts of stuff inside your IRA, you are probably going to have a tax disaster.
The reason for the disaster is the tax code says that if you personally guarantee your IRA, it is completely and fully distributed and loses all future tax deferral as well as any asset protection.
Review your brokerage agreements. 99% of them require you to guarantee your IRA account.
Thus 99% of your IRAs are fully distributed and you don't even know it.
This is a real disaster and the IRS, in search of revenue, is starting to go after these blown up IRAs"
Some expert in this thread states:
"While it is legal to trade futures and do all sorts of stuff inside your IRA, you are probably going to have a tax disaster.
The reason for the disaster is the tax code says that if you personally guarantee your IRA, it is completely and fully distributed and loses all future tax deferral as well as any asset protection.
Review your brokerage agreements. 99% of them require you to guarantee your IRA account.
Thus 99% of your IRAs are fully distributed and you don't even know it.
This is a real disaster and the IRS, in search of revenue, is starting to go after these blown up IRAs"
Ubti rules would eventually get a company like Apple starting as a ira.
Damn... I never knew that.
I just thought you could trade stocks in it.
So one could collect (I mean "invest in" lol) say....vintage anything with that money?
There's gotta be a catch.
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While it is legal to trade futures and do all sorts of stuff inside your IRA, you are probably going to have a tax disaster.
There is nothing in the IRS pub to draw such a wild conclusion. How can you have a tax disaster on non-taxed accounts - you don't even file a tax return for them. Maybe your so called expert is talking about early withdrawal for a regular IRA - a 10% penalty - hardly a "tax disaster".
Any problems will be in a self directed accounts, where you have a custodian like Midland, you could invest in collectables like art, stamps, coins, etc or buy a sailboat & claim its for charters when you only use it as a live aboard & recreation. These activities are prohibited by the IRS and will cost you in fines.
https://www.irs.gov/publications/p590b/ch01.html#en_US_2016_publink1000230799
IRS Pub - summary of what can't you do in an IRA.
What Acts Result in Penalties or Additional Taxes?
The tax advantages of using traditional IRAs for retirement savings can be offset by additional taxes and penalties if you do not follow the rules. There are additions to the regular tax for using your IRA funds in prohibited transactions. There are also additional taxes for the following activities.
What Acts Result in Penalties or Additional Taxes?
The tax advantages of using traditional IRAs for retirement savings can be offset by additional taxes and penalties if you do not follow the rules. There are additions to the regular tax for using your IRA funds in prohibited transactions. There are also additional taxes for the following activities.
Prohibited Transactions
Generally, a prohibited transaction is any improper use of your traditional IRA account or annuity by you, your beneficiary, or any disqualified person.
Disqualified persons include your fiduciary and members of your family (spouse, ancestor, lineal descendant, and any spouse of a lineal descendant).
The following are some examples of prohibited transactions with a traditional IRA.
If your IRA invested in nonpublicly traded assets or assets that you directly control, the risk of engaging in a prohibited transaction in connection with your IRA may be increased.
There is nothing in the IRS pub to draw such a wild conclusion. How can you have a tax disaster on non-taxed accounts - you don't even file a tax return for them. Maybe your so called expert is talking about early withdrawal for a regular IRA - a 10% penalty - hardly a "tax disaster".
Any problems will be in a self directed accounts, where you have a custodian like Midland, you could invest in collectables like art, stamps, coins, etc or buy a sailboat & claim its for charters when you only use it as a live aboard & recreation. These activities are prohibited by the IRS and will cost you in fines.
https://www.irs.gov/publications/p590b/ch01.html#en_US_2016_publink1000230799
IRS Pub - summary of what can't you do in an IRA.
What Acts Result in Penalties or Additional Taxes?
The tax advantages of using traditional IRAs for retirement savings can be offset by additional taxes and penalties if you do not follow the rules. There are additions to the regular tax for using your IRA funds in prohibited transactions. There are also additional taxes for the following activities.
What Acts Result in Penalties or Additional Taxes?
The tax advantages of using traditional IRAs for retirement savings can be offset by additional taxes and penalties if you do not follow the rules. There are additions to the regular tax for using your IRA funds in prohibited transactions. There are also additional taxes for the following activities.
- Investing in collectibles.
Prohibited Transactions
Generally, a prohibited transaction is any improper use of your traditional IRA account or annuity by you, your beneficiary, or any disqualified person.
Disqualified persons include your fiduciary and members of your family (spouse, ancestor, lineal descendant, and any spouse of a lineal descendant).
The following are some examples of prohibited transactions with a traditional IRA.
- Borrowing money from it.
- Selling property to it.
- Using it as security for a loan.
- Buying property for personal use (present or future) with IRA funds.
If your IRA invested in nonpublicly traded assets or assets that you directly control, the risk of engaging in a prohibited transaction in connection with your IRA may be increased.
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i don't understand how spread betting is still taxed ... ?