Thanks for the link. I'd have to guess that clause is a touch more than most brokers use (IB for example has: This is not actually a loan of existing assets but a promise to reimburse them for debits. I'm sure the IRS would claim this disallows the IRA but they are also not impartial (they want the revenue and like most in the gov't they feel they have a right to your money). I'd like to see a court case to resolve this as the IRS can say whatever they want but the courts do not have to agree.
It's simple, every single IRA account in the country violates the law, so we're all screwed. Note there is a big difference between the IRS wanting your money and them getting it.
Nope, you're still screwed. You might as well just sell your house and turn over the proceeds to the IRS.
Damn Bob, you're full of gloom and doom. This whole thing smells like death panels and H1N1 forced vaccination concentration camps to me.
When you say you can't use margin in a self directed IRA futures account, does this mean you must have ~ $50 * 1100 or $55000 to trade one contract, or does the performance bond rule, ~$2k per contract, still apply?
Uhhhhh, can't convert to a Roth. In order to convert you have to have an IRA. If your account violated the gobbledygook that means you don't have an IRA anymore. No IRA, no conversion, no Roth. If the broker does let you convert, then you are racking up penalty taxes of 6% of the value of the account, a year for making excess contributions. Please don't shoot the messenger. I think this stuff is as stupid as you guys do, that's why I asked for a ruling on the issue, I couldn't believe it.
Don't worry, you're not the first to bring this to anyone's attention. Still, it smells like death panels (i.e. conspiracy theories) to me. I'd also like to see a ruling one way or the other.
um, regardless of that ruling which is an obvious prohibited transaction... how are you guys who are actively trading your IRAs assuming you're getting around UBIT (hint:you're not!)? the purpose of IRA's is to reward long term investments, not active business. anyone actively trading out of one or running any active business is most definitely playing with fire. there is a way to use an IRA the way you guys want (active, including using leverage), but it's expensive (30k+), complicated, and will most likely get legislated out in the future as it involves using offshore feeders. i don't have time to get into details, but if you're interested, research and model what the big boys are doing with their non-profit endowment funds. ANY other way risks UBIT. my own personal view on IRAs after extensive research, is that they're near useless for any significant active money making without risk in forfeiture, UBIT, etc, etc. if you put on a couple trades a week or put some real-estate or gold in there, you'll probably be ok and they're decent for that as that's what they were designed to do.