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This opens up some excellent tax avoidance strategies. I'm assuming this is available also for IRA and Roth IRA. What you do is setup two transactions: One tha
by ars 6y ago
This opens up some excellent tax avoidance strategies.
I'm assuming this is available also for IRA and Roth IRA. What you do is setup two transactions: One that will lose money in the IRA, and the other that will gain in the Roth IRA. (A straddle.) Make sure you execute both at the same time (if it's a thinly traded security you can end up trading with yourself, but that's not necessary).
Then sell, and do it again.
You effectively move money from IRA to Roth IRA. (And yes it's legal, I contacted the IRS and asked.)
In the open market you can only move a small percent at a time, but with private equity the gains and losses are much greater and you can effectively move all your money.
- drocer88 6y agoIs this assuming you can pick winners?
- perl4ever 6y ago...and if you can, why bother with the losing side of the transaction? Conversely, if you can't pick winners, then I think you can only set up a pair of trades which sometimes moves money in and sometimes out, with a net of zero. I tried making charts of option prices in Excel and didn't come to any particular conclusion, except that maybe you always lose because of the dividend rules, spread, and commissions, and it seems like the maximum expected value is at-the-money. It makes me think of violating thermodynamics with Maxwell's Demon. If you trade with yourself, then it would be uninteresting plain fraud, and if you don't, I have the feeling the market will prevent you from getting anywhere.