IRA’S
There’s little relief for IRAs victimized by Ponzi schemes, IRS privately says.The deductible loss is limited to your tax basis in the IRA…that is, the sum of your nondeductible contributions. You can claim the loss only after the balance in all your IRAs is paid out. And any deductible loss is a miscellaneous itemization, deductible only to the extent the total exceeds 2% of your adjusted gross income. IRA owners can’t pledge funds in other accounts to cover IRA shortfalls, the Labor Dept. says. Before an investor could open a self-directed IRA allowing himto buy and sell securities using his IRA funds, his brokerage firm said that it needed to have a security interest in his other accounts with the firm. That way,
liabilities incurred by the IRA would be covered. But Labor said the arrangement amounted to an extension of credit to the IRA by its owner, which is a prohibited transaction.
Also prohibited: Pledging one’s IRA funds to cover the debts of non-IRA accounts.
There’s little relief for IRAs victimized by Ponzi schemes, IRS privately says.The deductible loss is limited to your tax basis in the IRA…that is, the sum of your nondeductible contributions. You can claim the loss only after the balance in all your IRAs is paid out. And any deductible loss is a miscellaneous itemization, deductible only to the extent the total exceeds 2% of your adjusted gross income. IRA owners can’t pledge funds in other accounts to cover IRA shortfalls, the Labor Dept. says. Before an investor could open a self-directed IRA allowing himto buy and sell securities using his IRA funds, his brokerage firm said that it needed to have a security interest in his other accounts with the firm. That way,
liabilities incurred by the IRA would be covered. But Labor said the arrangement amounted to an extension of credit to the IRA by its owner, which is a prohibited transaction.
Also prohibited: Pledging one’s IRA funds to cover the debts of non-IRA accounts.
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