Tax question on ES futures and options

Discussion in 'Taxes and Accounting' started by nravo, Mar 17, 2008.

  1. nravo


    Let's I sell ES futures in a taxable account and buy them in a tax-deferred IRA. Then, I book a loss in the taxable account and a gain in the tax-deferred.

    Have I created a tax straddle issue that will disallow the loss in the taxable account?

    What if it was reversed? Would the gain be taxable?

    What if I used ES in the taxable and, say, DJX or ER2 or NQ in the tax-deferred?

    (The purpose of the trade, which one can quibble with and may not be germaine to this question, is to sell volatility on each side with options.)

    If I do a few of these trades, I don't want to get hit with some obscure tax straddle rule. Will I?
  2. Foz


    The IRA is a separate entity and has a separate tax id number (TIN) than you do (your social security number) so there are no straddle issues from one to the other. Nor would there be wash sale issues. Gains and losses in your taxable account are taxable or deductible regardless of what you are doing in your IRA.
  3. nravo


    Three questions then, if what you say is true: 1) How do you simultaneously do a tax straddle with futures (buying and selling the same contract simultaneously) if not in two accounts? 2) Didn't the IRS just issue a new ruling on wash sales in an IRA a few months ago? 3) Would buying and selling the same contract in two accounts fall under self-dealing regs at the SEC?