Horace Heffner wrote:
- quote -

HH- I posted something a couple days ago, but it didn't seem to go
through...you should verify that the specific investment you plan to buy
is OK for tax purposes. You mentioned a gold ETF I believe and there was
a private letter ruling about a couple of those last year. A "PLR" is
IRS guidance regarding a specific set of facts and has limited
applicability beyond those facts, but tax geeks look to them to see what
the IRS says about narrow issues.

Anyway -- in addition to UBTI (which can come up with a number of
different securities that look like "stocks") there's also the
prohibition on owning "collectibles" in an IRA, including precious
metals if held a certain way. The PLR was requested by one of the
gold/silver ETF providers. The IRS stated that the ETF in question would
be acceptable, that it wouldn't violate the prohibition on collectibles.

I would suggest asking for similar guidance from a product provider
because if you fail the "collectibles" prohibition, the purchase is
considered a distribution of the amount invested.

-Tad

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On May 5, 4:50*am, beliav...[at]aol.com wrote:
- quote -

Thanks all for the advice, especially the above. This appears to be
crucial information to anyone taking distributions from an IRA under
section 72(t), as it can materially change the balance and thus
subject the account to full tax and penalties.

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On May 2, 4:40*pm, Horace Heffner <hheff...[at]mtaonline.net> wrote:
- quote -

I think those are fine.

One should beware of investments, such as Master Limited Partnerships,
that produce substantial "unrelated business taxable income", in an
IRA, which can be taxed when it exceeds a certain threshold, I believe
$1000. You can Google "unrelated business taxable income IRA".

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On May 2, 10:40*am, Horace Heffner <hheff...[at]mtaonline.net> wrote:
- quote -

I think those are ok, and even better in IRA so you don't hit those
special tax issues of selling "collectables" or whatever that trap is
for precious metal etfs, or also K-1 taxation for commodity etfs
structured like a partnership. And best of all you can buy and sell,
buy and sell without hitting "wash sale" rules (those do seem pretty
sell-worthy now).

Restrictions that I seem to recall is you can't structure something
that essentially translates into real estate (altho reits ok) or short
anything (altho inverse etfs are ok). Some brokerages seem to have
sanity checks on their buying software so it will alert you if not
suitable. If I have this wrong, it should rouse some greybeards to
respond here...

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On May 2, 3:40*pm, Horace Heffner <hheff...[at]mtaonline.net> wrote:
- quote -

Limitations on trading depend on your brokerage house. My brokerage
makes some comments on my portfolio.

A brokerage will look a little at your investing practices to keep
things from getting too weird.

ETFs and stocks that trade on the major exchanges shouldn't be a
problem. Or covered calls should also be OK. Buying calls might be
perceived as being too risky for some brokerages. But selling
uncovered calls are unlikely to be allowed.

--
Ron

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Is ownership of any kinds of stock prohibited within an IRA? Of
special interest are commodity based ETFs like GLD or mining related
ETFs like GDX. Thanks.

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