IRA Rules

Archive for June, 2008

Inheriting an IRA – Make sure you pay attention to the rules.

Question: Does the Wash Sale rules apply if replacement shares are purchased in an IRA account?

If I sell shares out of my brokerage account, and by identical shares in my IRA account with in 30 days, will I be able to deduct the loss that occured from the sale of the shares in my brokerage account? I can’t seem to find a defnitive authoritative answer on the web. Any experts or people who have had a professional answer this please respond.
buy, not by…

Answer: No one else has answered this, so I’ll give you my amateur answer.

The purpose of a wash sale is a transaction where you have no economic change. You don’t necessarily have to buy the same number of shares, but the “wash” part of the sale includes only the same number in the new purchase. For example, if you originally had 150 shares, and you sell them and repurchase 100 shares, you had a wash of 100 shares and you have to record a gain or loss for the other 50.

For the 100, your original basis transfers, and I’m sure you’re allowed to add to your basis any new costs incurred to maintain the investment.

As for the IRA, that’s where I’m not so experienced. As long as your IRA allows investment in stock, I don’t see why you can’t apply the shares. As far as I can tell, there is no prohibition in the wash sale rules, and for the contribution, your basis in the shares (original) would be what you record on your 1040 for a deduction, all limits apply.

You might want to get a second opinion on this.

Mark Hunt vs Ray Sefo Part 2

Question: Roth IRA withdrawal and no penalty?

is it true that i can withdraw the principal from my Roth IRA without being penalized? if i deposited 5,000…and it is worth 6,000…can i withdraw 5,000 without any penalty?

Answer: Yes, this is true, and the interest it makes, you can withdraw after 5 yrs, without a penalty !

Roth IRAs Make Great Estate Planning Tools