I do a lot of trading in my main taxable IB account. Several of my intraday strategies are reliable and proven enough (and largely long only), that I would like to stop paying taxes on those consistent profits and earn these gains in my Roth IRA. I do not presently have my IRA at IB and would like to make sure this will be feasible before transferring it. A couple questions for anyone who trades both their IRA and regular account at IB: 1. Can/do you manage both accounts from the same TWS instance, or would I need one per account? I've read a little about advisor sub accounts that suggested that might be an option. 2. in terms of allocating trades, I read about pre-trade allocation settings and it seems like it might be possible to pick whether each trade would go to one account, the other, or some mix. If you use IB's trade allocation, I'd be happy to hear more about it. Is it possible to set allocation rules per ticker for example? I read about IB's post-trade allocation, but it wasn't what I hoped (i.e. winners to IRA, losers split with the Feds) . 3. Any other IRA-related issues I should be aware of at IB? I'm guessing no short selling or portfolio margin unless you go the self-directed LLC route which might be more trouble than I'm willing to do at this point. What about buying power issues with multiple open orders? Thank you in advance.
I have both a cash and IRA account at IB. A few years ago I set up a "friends and family" manager account to control them both. It works pretty well. You can control both accounts in addition to trading in the management account itself. It's also more cost efficient since you can do all your data subscriptions in the manager account and cancel the data in the managed accounts. To my knowledge the best you can do with an IRA account is a margin account. Of course it's not full margin so there's no shorting stocks, no naked calls. I went with a margin IRA so I could do option spreads and it's been very satisfactory. I don't believe you can do portfolio margin in an IRA - at least not without legal convolutions. I'm not sure it's worth it anyway.
am still in the middle of this, but basically someone on this forum mentioned something about SD 401(k) trading and after having stated what I knew, which was from 2011, I went ahead and did some more research of my own to update my knowledge... you can indeed, and rather easily... setup a SD 401(k), open up a trust account with IBKR and obtain portfolio margin to trade with them... you might or might not have to deal with UBIT, I am still talking to a few tax attorney/accounts about that, basically am searching for one that specializes on UBIT which I will use for that trust only... if you have a strategy that generates consistent returns, and benefits your IRA and want to increase your buying power, then look at the SD 401k... it will cost you around $1500 all in with LLC creation, etc. but if you have enough cash on your IRA, where you dont need leverage.. then you are all set and just use the F&F setup to manage both accounts...
There is no way around UBIT (other than setting up a UBIT blocker corporation in a tax haven, which is what large foundations and non-profits do) so the idea of using margin in a 401(k) makes no sense.
that was my thought as well based on what i understood about it, but as I said.. I am consulting with those that prepare trust taxes for a living... so we shall see...
Sure - by all means let us know if you find out anything different.....but meanwhile it may of of interest to search on "UBIT-blocker corporations" which are a major reason that every major non-profit foundation and hedge fund owns a subsidiary in a tax haven. Mitt Romney did the same in his IRA so that he could use leverage. It is really a loophole that Congress would like to close but cannot because so many wealthy investors are using it........
This article explains how to use a tax-haven UBIT blocker corp as Romney did. http://www.nytimes.com/2012/02/08/u...-scrutiny-of-offshore-tax-shelters.html?_r=2&