IRA Rules

Archive for November, 2006

Question: Wash Sales Rule- using multiple brokerages?

Does the Wash Sales Rule apply if:

The purchases and sales were made with 2 different firms?
Scenario-
Buy XYZ on 7/1 using Fidelity.
Sell XYZ on 7/3 at a loss using Fidelity.

Buy XYZ on 7/2 using Tradestation.
Sell XYZ on 7/5 using Tradestation.

I understand that your loss may be disallowed if a person/entity related to you make a purchase (for example an IRA).

However aren’t the shares specifically identified because they are held within two different accounts with two different firms?

Answer: The shares being identified doesn’t change the law. It doesn’t matter where your trade. If you bought stock somewhere within 30 days, your loss cannot be recognized. The law recently changed requiring brokerage firms to report cost basis data on stocks to the IRS. I am not sure of the start date, but I think it is in effect now for 2009 tax reporting. This will make for more accurate tax reporting hence forth.

MARTHA WASH & IRA LEVI

401K to IRA Rollover – Case Study

Question: When I change my IRA to a Roth IRA can I pay the taxes from the IRA?

I am retired and want to change my IRA to a Roth IRA so I don’t have to worry about future taxes from the Roth IRA.
what are the rules of the Roth IRA?

Answer: It the same rules as for an IRA. The difference is on the withdrawal. Roth’s you have already paid them and for a standard IRA you have not. So on each payment from an IRA you will owe taxes. On a Roth each payment will be tax exempt.

Yes, you can have them withhold the taxes from the amount being rolled over. Just tell them what percentage to withhold (min 10%).

Not sure why you want to pay a lump sum to the IRS at this point? Are you expecting large gains from the market????

Tax Free Real Estate Investing With Your IRA