No. of Recommendations: 2
I know that a trade of a like security in a tax advantaged retirement account within 30 days of a losing trade in a taxable account may require that I pay taxes on gains in the tax-advantaged account & possibly interest & penalties. Is this still true if I make the MTM election?

I don't believe that's true. Only UBTI exceeding $1,000 will require a tax deferred account (not you) to pay tax. I cannot think of another situation for which a tax deferred account would be subject to taxation.

Failing the 30 day holding period of the wash sale rule by selling at a loss in a taxable account when you purchased 'substantially identical' stock in a tax deferred account either within 30 days prior to or 30 days following the sale, will result in losing the deductibility of the loss.

I have no experience with MTM, but my understanding is that wash sale rules do not apply to those who make the MTM election, as you already have to declare as ordinary income all net gains at the end of the year and gains are treated as ordinary income, not capital gains, so there really isn't any basis to adjust with a wash sale.

I'd suggest you post this question at Kaye Thomas web site at The folks there are very good at handling tough tax questions.

Print the post  


The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.