IRA Rules

Posts Tagged ‘roth iras rules’

Question: Regarding Roth IRAs. I once owned a home but am now renting. Can I use some of my roth money for money down

The rules say, “for a first home”. I wonder if that mean for the purchase of your first home (as in first home ever) or if that is referring to your first home as in your primary residence (vs putting that money toward a 2nd home/cottage)

Answer: To qualify for “first time home buyer” you can’t have owned a home anytime within the last 2 years. And the rules say that it is the same rules as for a regular IRA, which limits the amount to $10,000 during your lifetime.

Question: Does the pattern daytrading rule apply to retirement accounts, like an IRA?

If I buy a 50 shares of say QID in the morning. Then later buy another 50 shares of QID later that day. Then before market closes the same trading day, I sell all 100 shares. Does that count as 1 or 2 roundtrip trades?

Answer: I would say one but ask your account rep. The deal with IRA“s is that you must wait three days for funds to settle before you can sell twice. In other words if you own 50 QID and sell it you may then use those funds to buy QID or something esle but cannot sell again until funds settle or you will be in violation of the free ride rule. In odrer to day trade much you would need a very large cash reserve. I couldn’t tell you if the 5 pattern day trades per week applies to an IRA but I see problems attempting to day trade the account because of the affore mentioned rule.

Estate-Planning_IRAs.mp4