anyone want the details on how to do this??? kidding. it is pretty common here in central america. not to hard really...but yes, it is illegal. bunch of sheisters down here.
Yes, i want the details please, i know its obvious to you guys, but im still trying to make sense of it. So lets say i bought LMRA in my regular account at $2 and it's now at $7.5. So i place a limit order to sell my LMRA at $7.5 in my regular account and then take that offer with a buy order in my IRA account. Haven't I now ended up with a long LMRA position in my IRA account and no position in my regular account, but have now realized my $2 to $7.5 gain in my regular account. Am I not now taxable on this gain in my regular account, and just ended up with a long LMRA position with no gain in my IRA account?
look, this is an issue of LEGALITY< not practicality it is illegal (i think cites were already provided) to use the markets to create the false impression of order flow, when in fact you are just trading your own shares with yourself. it's that simple
That's not the way to transfer gains from one account to another. Say LMRA is an after-hours ghost town. There are no market participants besides you and your 2 accounts. You have $250,000 in taxable gains in your domestic account ('Account A') , and wish to illegally transfer those gains to a hidden offshore account ('Account B'), thus greatly reducing your tax liability. You proceed to have account A offer out the shares at $7, immediately buying at that price in account B. Then account B offers those shares at $8, with account A buying at that price. Repeat this procedure as many times as needed, until the domestic account no longer has that pesky tax liability any more.
yep. that was the game. there used to be lots of thinly traded stocks that had no after hours support.
A sale is still going to register on your 1099 Gross Proceeds for account A matching to the original BUY resulting in a capital gain. Am I misreading this?
...but that gain is completely negated by the artificial losses you'd create, as described in my example. Look, it's no big deal. This whole hypothetical situation is nothing more than one big <b>moot point</b>. If one wanted to illegally evade taxes, there are far more logical ways to do it.
nearly all stocks are thinly traded in the after hours unless there is news. are you saying that there are no longer lots of thinly traded stocks in the after hours?
no. there used to be thinly traded stocks that had no bid or offers after the market closed. you could be the only player on both sides.