Actually its kind of easy to get around the ubit issues. The first issue is if you are running an active business by your trading. Look at the Tax Court cases where the IRS has disallowed trader status. Don't do intraday trades. Hire someone to help with the trades. Skip a few days or weeks inside your IRA. Just as its tough for taxpayers to get trader status, make it tough for the IRS to try to pin it on your IRA. As for the idea of using foreign corps as blocker entities for UBIT, not sure why it would cost 30K. You can set up an IBC for about 1k, that's all you need. Also doubtful its going to be legislated away. Too many large endowments rely upon it heavily. Just my 2 cents.
ha! 1k is all you need! i spent almost 6 months on this. i guarantee you, if you can set up one of these complicated structures that don't avoid DOL laws and don't stick you with any CFC or PFIC taxes for a thousand bucks than hats off to you. the actual reality is, you'll need to be working with both erisa and foreign corp lawyers during setup and then afterwards when they inevitably challenge your ass. re: legislation, people said they'd never go after swiss banks either. to each his own though.
im going to cash in all my ira's pay all penalties and taxes, and be done with it. thanks for the heads up
Unless you have years of experience trading futures, using your IRA account to fund it is not very smart. Whenever I see this, its clear to me that the person who is attempting to pull this off has already blown away whatever funds they had prior in non-IRA accounts. My advice to them is, if you lost money trading your margin broker accounts, what makes you think you can trade futures successfully? I don't like seeing newbies getting hosed in something they aren't familiar with. My suggestion to the op is to find a mentor/trainer to teach you how to trade futures for a couple of weeks. Then practice paper trading to build confidence. Then go for it but have a stringent business plan with money management and goals in mind coupled with tight rules that must be adhered to. If you aren't willing to do any of the above, you might as well toss all your IRA into a furnace.