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Financial Planning / Tax Strategies


Subject:  Re: Wash Sale Losses Date:  9/24/2001  11:36 PM
Author:  lorenzo2 Number:  54194 of 127549

To fund any IRA one must have earned income. You must fund your IRA with cash only, presumably from earnings. You are purchasing whatever is in your IRA (be it stocks, bonds, gold, or CDs) with cash from earnings, NOT from the sale of investments.

It's certainly true that the original source of funds in an IRA must be earned income, but it's absurd of you to say that you can't buy things within an IRA with the proceeds from the sale of an investment. If you have a brokerage account as a self-directed IRA, you can buy and sell (within the IRA) as much as you want. In particular, you can sell one stock and buy another with the proceeds...

Buying a stock within your IRA and selling an identical stock in a taxable account within 30 days has no bearing on the tax treatment of the sale. IRAs & taxable accounts are like apples & oranges. Wash sale rules pertain to buying & selling in taxable accounts only, not IRAs.

This is quite misleading; ptheland is correct when he says that we just don't know for certain. There apparently have not been any IRS rulings that bear directly on this issue, but neither is it clear that you can't run afoul of wash sale rules with, say, a sale in a taxable account and a purchase (within the wash period) in an IRA. See, for example, the discussion at:
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