More and more people have been tapping into their IRAs in order to finance trading and investment plans. There are a number of companies now promoting structures such as “Self-Directed IRA-Owned LLC” or “Custodian IRA-Owned Trusts”. While those companies may provide online education to support these structures, leading trader tax CPAs and attorneys do not always agree with their conclusions.
Many traders could be incurring IRS penalties by using their IRA and other retirement plans to finance trading activities in creative ways – such as the “IRA-Owned LLC” and similar structures. Not only are the penalties a concern, but there is a risk of losing tax-exempt status on the retirement plan. Recently, Robert Green, CPA and CEO of Green & Company, Inc. published an important article warning about the dangers involved in some of the IRA strategies being marketed online.
In his blog article, Robert Green highlights some of the risk factors involved with these popular IRA schemes. He also includes some comments and opinions from tax attorneys. If you are thinking about putting your retirement funds to work in your trading activity then we encourage you to check out his article and watch the webinar he references as well.
Robert Green also highlights five safe strategies involving IRAs in his article, including:
Check out these strategies and detailed information in Robert Green’s article: Learn the DOs and DON’Ts of using IRAs and other retirement plans in trading activities and alternative investments.
Be smart about tapping into your IRA! It’s always important to fully understand the tax and legal implications of decisions you make with your IRA account. Some websites can be vague or even misleading so you need to read the fine print and do the extra research. It is also a good idea to consult with your own CPA or attorney about options available based on your circumstances.
Please note: This information is provided only as a general guide and is not to be taken as official IRS instructions. Cogenta Computing, Inc. does not make investment recommendations nor provide financial, tax or legal advice. You are solely responsible for your investment and tax reporting decisions. Please consult your tax advisor or accountant to discuss your specific situation.