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It is most definitely an abuse of IRA's to shield from capital gains taxes this way. It was never meant to be used for this. On Wall street bets they talk abou
by conanbatt 5y ago
It is most definitely an abuse of IRA's to shield from capital gains taxes this way. It was never meant to be used for this.
On Wall street bets they talk about buying options with IRA accounts (famously wsbgod for example) so it happens frequently and with large amounts.
- IncRnd 5y ago> It is most definitely an abuse of IRA's to shield from capital gains taxes this way. It was never meant to be used for this. That is what an IRA is, a shield from capital gains. They are not meant just for people who lose money or whose investment growth is very low. It's meant for people who put money into them. It's wrong to blame the successful entrepreneurs, because they were successful. You know that when he wants to use any of that money or when he has to take distributions that taxes will be paid, and those taxes will be higher compared to them having been paid along the way.
- conanbatt 5y agoThey wont be paid if he doesn't sell before 60. This will be completely untaxed. Thats the IRA abuse: its meant to be used tax deferred as a retirement scheme for a certain amount (6k a year) not for billions. But because of its mechanics you would like to put your wildest shots into IRA's (say, option trading) because it has the highest expected value in case it goes up. In the spirit of the program, there would be a cap to how much money will be shielded from capital gains tax.
- IncRnd 5y ago> They wont be paid if he doesn't sell before 60. This will be completely untaxed. I do understand this. I just disagree on this being an abuse of the vehicle. Active option trading from within the vehicle is separate and does seem like an abuse.