So you mean if you trade successfully and frequently in an Roth IRA account, you will be pursued by IRS for tax?
I suspect someone made withdrawals prior to 59.5 years of age which resulted in taxes and penalties. - Spydertrader
I have one computer that's used for games with a 10,000 rpm SCCI which runs very fast. My other SCCI are older (bought them new) and you can see the difference. But I don't need speed as much as rock solid dependability since I'm in the market all day long.
That is exactly correct. In theory you will get away with it but who here isn't trying to "strike it rich quick" by trading often enough to make a bundle. IF you do you will be swatted like a fly on the wall after you've been given sufficient rope(time) to hang yourself. The penalties alone are 20%. Then there is the possibility you have "evaded" taxes as well. What good is all the money when you have to pay it all back to stay out from behind bars and you lost your tax advantage anyway? I've closed all my Roth accounts (I'm over 59 1/2).
I have no explanation of this at the IRS website. I have never heard of a case like this. I am not doubting you. (I have read thousands of pages as a hobby...really I know... geeky isn't it) Wifey has a traditional IRA...what can they do about that?...she tripled her money in two years...drew out the money, paid the tax and bought this condo...now she is building again and taking the write-off during the building stage, as it is not a ROTH...
I stand correct, but now have questions. How can the IRS asses taxes and penalties on a Roth IRA if the person making the withdrawal is over 59.5 years of age? By statute, gains in a Roth IRA produce Tax Free Earnings. Could you explain what reasons you were given for the taxes and penalties? From IRS.gov: - Spydertrader
NO that is not true. BTW, the IRS just doubled their budget to go after people who fail to pay taxes to close the tax deficit. They'll audit people who make over $100K. That's what they said they're going to do. So here you are the one in a million, who makes a million in your Roth. You're DEAD! Don't take my word for it. Hire one of those law firms in Washington D.C. with 80 lawyers on the letterhead and get a private ruling letter from the IRS. Go ahead. Get your checkbook out. Let me know how you make out. If you get a favorable letter you're good to go but it's only good for you. I'll save you some money you won't get it if you're trading frequently. Sorry, it's an illusion like this is still a free country.
Actually I have done that....but I got under a program to have it for free...I had my day in Tax Court and was able to exclude 10k from penalty from my earlier traditional IRA account that I liquidated. I used it to buy a House in the hills of the west side of El Paso Texas... Don't take my word for it. Hire one of those law firms in Washington D.C. with 80 lawyers on the letterhead and get a private ruling letter from the IRS. Go ahead. Get your checkbook out. Let me know how you make out. If you get a favorable letter you're good to go but it's only good for you. I'll save you some money you won't get it if you're trading frequently. Sorry, it's an illusion like this is still a free country.
There is nothing wrong with "structuring your affairs to avoid paying taxes" in the United States. Then there is the possibility you have "evaded" taxes as well
I apologize if I gave the impression I ran afoul of the IRS and had to pay taxes and penalties. My trading in the Roth was long term in Gold, CrudeOil, and so on. Trades put on years ago and held until I just closed the accounts. That's okay (hopefully). We'll see. I'm over 59.5 and have accounts open more than 5 years. I wanted to trade frequently (3 to 6 trades a day) the indexes TAX FREE in the ROTH. NO WAY! Like I said it is an illusion. You'll wind up paying in excess of 40% when they get done with you.