Archive for May, 2005
Ira Tax Rule
May 28th, 2005
Question: Are you allowed to sell a stock in a tax advantaged account and immediately buy it back in a regular account?
I want to sell some stock in my Roth and recognize some capital gains. I also want to immediately buy the stock back in a regular brokerage account. Are there any rules against this? If not, seems like a great idea to lock in those gains in an account where you don’t pay any capital gains tax.
If you are allowed to do this, it seems like you can abuse it. Example: in illquid stocks with a wide bid-ask spread, one can sell and buy at the same time using one’s own tax-advantaged account and regular brokerage account-recognizing the gains in the IRA and the losses in the regular one.
Answer: There shouldn’t be any tax problem.
But why would you buy a stock EXPECTING a capital loss?
If you really expect the stock to go down don’t buy it. If you expect a down-turn in the market [in that stock or in the general market], go into cash or short term bonds that won’t get hit with capital losses.
Rule#4: Diversify! Diversify! Diversify!
Posted in IRA Rules | 
Tags: adviser,, beneficiary ira tax rules, inherited ira tax rules, ira, IRA Tax Rules, ira tax rules 2010, out, phase, roth ira tax rules, rules | 
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