Can I amortize a premium bond held in a tax-exempt account?

#3 04-21-2004, 05:45 AM

ed <ed[at]edcosoft.com> wrote:
- quote -

> kamlet[at]panix.com (Arthur Kamlet) wrote:
> > Rich Carreiro <rlcarr[at]animato.arlington.ma.us> wrote:
> > > toddcool[at]att.net (Todd Cool) writes:

> > > Tax-wise, IRAs are a black box --
> > > they only have a potential tax effect when money goes into
> > > them and when money comes out of them. What goes on inside
> > > of them doesn't matter.

> > So, Rich, I can now assume you agree with me that buying stock
> > inside an IRA cannot result in a wash sale when stock outside an
> > IRA is sold for a loss?

> One potential tax effect they have when "money goes into
> them" is to be replacement shares for a Wash Sale. What
> goes on inside "doesn't matter" so you can't recover your
> loss. What'w really happening is that you are trading in
> related parties--a no recovery No-No ed

But S 1091 (?) specifically provides for recovery of loss by
having the disallowed loss added to the basis. Wash sale
treatment is both disallowing the loss and adding that loss
back into basis.

Actually, I suspect if the IRS had wanted to make an
example, and thought they had a strong case, that would have
happened by now.

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

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#2 04-19-2004, 08:08 PM

kamlet[at]panix.com (Arthur Kamlet) wrote:

- quote -

> Rich Carreiro <rlcarr[at]animato.arlington.ma.us> wrote:
> > toddcool[at]att.net (Todd Cool) writes:

> > Tax-wise, IRAs are a black box --
> > they only have a potential tax effect when money goes into
> > them and when money comes out of them. What goes on inside
> > of them doesn't matter.

> So, Rich, I can now assume you agree with me that buying stock
> inside an IRA cannot result in a wash sale when stock outside an
> IRA is sold for a loss?

One potential tax effect they have when "money goes into
them" is to be replacement shares for a Wash Sale. What
goes on inside "doesn't matter" so you can't recover your
loss. What'w really happening is that you are trading in
related parties--a no recovery No-No ed

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

#1 04-18-2004, 05:53 PM

Rich Carreiro <rlcarr[at]animato.arlington.ma.us> wrote:
- quote -

> toddcool[at]att.net (Todd Cool) writes:

> > I have purchased a taxable bond in my IRA account at a
> > premium of 25% over the face amount of the bond. Is there
> > any way I can amortize this premium and reduce my taxes
> > overall, even though this is a premium taxable bond (Fannie
> > Mae issue) held in a tax-exempt account?

> No, you can't. The investments you hold inside an IRA are
> completely irrelevent to and are completely ignored on your
> taxes (unless you invest in something prohibited and thus
> void the entire IRA). Tax-wise, IRAs are a black box --
> they only have a potential tax effect when money goes into
> them and when money comes out of them. What goes on inside
> of them doesn't matter.

So, Rich, I can now assume you agree with me that buying stock
inside an IRA cannot result in a wash sale when stock outside an
IRA is sold for a loss?

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

04-13-2004, 06:59 AM

toddcool[at]att.net (Todd Cool) writes:

- quote -

> I have purchased a taxable bond in my IRA account at a
> premium of 25% over the face amount of the bond. Is there
> any way I can amortize this premium and reduce my taxes
> overall, even though this is a premium taxable bond (Fannie
> Mae issue) held in a tax-exempt account?

No, you can't. The investments you hold inside an IRA are
completely irrelevent to and are completely ignored on your
taxes (unless you invest in something prohibited and thus
void the entire IRA). Tax-wise, IRAs are a black box --
they only have a potential tax effect when money goes into
them and when money comes out of them. What goes on inside
of them doesn't matter.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

#-1 04-12-2004, 10:33 AM

I have purchased a taxable bond in my IRA account at a
premium of 25% over the face amount of the bond. Is there
any way I can amortize this premium and reduce my taxes
overall, even though this is a premium taxable bond (Fannie
Mae issue) held in a tax-exempt account?

Thanks in advance,
Todd

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

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