A great idea, or, does this already exist?

Discussion in 'Economics' started by SomeYoungGuy, Apr 28, 2010.

  1. The money in my IRA I do not consider risk capital; I want to preserve this equity even at the risk of much diminshed returns. I have my gambling account, and my IRA is not it. It's parked in a very boring bond fund that isn't doing much of anything. Which is just the way I likes it.

    Why doesn't some big smart investment house figure out a way to transfer a bunch of their tax liability to a specific instrument that I can buy in my IRA?

    Meaning let's say Associated Investment Bankers made a bunch of money this year and they owe a ton in short term cap gains. Why can't they transfer that cap gains tax over to something like their "IRA1" fund? Let me take the full brunt of the tax, which I don't have to pay, and for my trouble I get a tidy little return.

    I buy a share for $100 and hold it for a year. At tax time, they dispurse $9 per share but it comes with a pass-through cap gains tax of $10. If I held this fund in a street account, I would be net -$1 for the year. But in a tax-free account, that $10 cap gains get stripped away and I just keep the $9 per share dispersement.
  2. There's just one flaw in your plan:

  3. goldman sacs hasn't paid taxes in years the just move it or defer it

  4. Well, yes, I know. Those are the guys I'm trying to loophole. I figure a deal like this would get sewn shut in a year or two.

    Alternately, what investments are out there that are unattractive / underpriced for tax reasons that could be negated in a tax-free account?
  5. You could short an equivalent asset in your taxed account as you go long in your ira account. If the asset goes up, the gains are untaxed and you can record the losses as tax assets. And the assets in your ira go up.

    For instance, short xlf and go long iyf. It's a risk free way to maximize your taxfree assets.