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|Subject: Re: newbie IRA question||Date: 3/4/2004 5:32 PM|
|Author: going2win||Number: 39682 of 77568|
For example, if I had any amount of money in an online IRA account, I could conceivably do short term day trading to increase my IRA account balance. But am I subject to the short term gains taxes the same as a regular traded account where I can withdraw the amount without penalty.
I have an IRA with TDWaterhouse, and I use it to trade stocks. HOWEVER, there is a rule that states that IRA accounts may not be used for day-trading, which means that if you open a position in the morning and close it before the end of the day, your account will be flagged as a day-trading account. Believe me, I know since I tripped this rule early on in my trading experiments. You can't open short position, but you may buy puts and calls. So, IRA accounts are better for swing-trading where a position may stay open for days or weeks.
On the tax side, you do not pay taxes on short-term or long-term gains in your IRA. OTOH, you don't get a tax deduction for your losses. You do get taxed at ordinary income rates when funds are withdrawn (assuming a rollover IRA from a 401K)
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