Arthur L. Rubin <ronnirubin[at]sprintmail.com> wrote:
- quote -

How is "self-dealing" defined? Two transactions take place
on separate days with arms-length third parties, involving
completely different (albeit fungible) instruments.

Seth

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- quote -

But I'm not selling it TO or buying it FROM my IRA; I'm
selling something on the open market, and the next (or
previous) day my IRA is buying something different (but that
looks a lot alike) on the open market.

Seth

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- quote -

Your interpretation that buying a stock on the open market
in one account, and selling a stock with the same CUSIP a
few days later from an account I control being self dealing,
is not something I can agree with. [... how to punctuate
that?]

I believe that rules against self dealing are largely
motivated by fear that doing the buy+sell to the account
will not be at market prices. Now suppose you did it as an
after-hours trade on an exchange where the particular stock
is seldom traded after hours. Lets say no standing bids are
made. You enter a limit buy order on one account and a
matching limit sell order in the other account in a short
time. There I see self dealing. You can really make the case
egregious by entering a limit Buy in the IRA at a
below-market price, seeing that that is currently the best
bid price , then entering a matching Sell from the non-IRA
account. That is very different from doing trades in a
liquid low-spread stock 24 hours apart.

I also think that this is not a topic that has escaped the
notice of the law makers. So the fact that they do not
specifically forbid near-in-time deals means to me that it
is not forbidden.

I find your opinions to generally be quite sound. This one I
can't buy. However my opinion is my opinion. I do not claim
authority.

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ed wrote:

- quote -

Although I generally agree with "redundant," it appears that
there may be a distinction as to what happens to the
disallowed loss depending on the EXACT reasons for which it
was disallowed.

MTW

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D.F. wrote:
- quote -

It's changed since the last time I looked at it. There used
to be a similar page which stated that such a sale is
illegal (indirect) self-dealing, thereby creating a
distribution from the IRA, if not voiding the IRA. You
cannot sell ANYTHING to your IRA, nor buy ANYTHING from your
IRA. Whether you can sell something in your traditional IRA
and buy it in your Roth, or in your spouse's traditional
IRA, is a different question.

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ed wrote:
- quote -

There is something wrong with "self-dealing" with respect
to an IRA. There isn't, with respect to dealing between
two related entities, if neither is an IRA.

However, it looks as if he's changed his position again,
based on the assertion that the IRS interpretation in
publication 550 is reasonable.

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mickeysz[at]hotmail.com (Mickey Sz.) wrote:

- quote -

It doesn't matter the order. If the sale and purchase are
within 30 days of each other, the loss from the sale is
deferred.

--
Barry Margolin, barmar[at]alum.mit.edu
Arlington, MA

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- quote -

http://www.fairmark.com/capgain/wash/wsira.htm is the article I
suspect you are referring to. It quotes IRS Publication 550:

---------------------------- Indirect transactions. You cannot deduct your loss on the
sale of stock through your broker if, under a prearranged
plan, a related party buys the same stock you had owned.
This does not apply to a trade between related parties
through an exchange that is purely coincidental and is not
prearranged.
----------------------------
I am still skeptical of the article interpretation in this
case.

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"Mickey Sz." <mickeysz[at]hotmail.com> wrote:

- quote -

No, of course not. What account you have it in is wholly
irrelevant.

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

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Mickey Sz. <mickeysz[at]hotmail.com> wrote:

- quote -

Sure, this is known as "doubling up."

You double up, hold for more than 30 days, and then sell the
original batch and you have a claimable loss.

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

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mickeysz[at]hotmail.com (Mickey Sz.) wrote:

- quote -

No, Mickey. Wash rule prevails for trades 30 days prior to
or after the sale. Sorry.

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"Arthur L. Rubin" <ronnirubin[at]sprintmail.com> wrote:
- quote -

No, he believed it was a related party sale, in which case
it was redundant whether it was a wash sale or not.

- quote -

He didn't mention "self-dealing", it was a "related party
sale", and there's nothing wrong with a related party sale,
or "self dealing", if the sale is at a gain. Obviously some
posters have not read the rules we're discussing. ed

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- quote -

Sure, but only if you bought the replacement shares more
than 30 days before you sold the original shares. Anything
closer than that and you have a wash sale. It doesn't
matter whether the sale or the purchase comes first.

Ira Smilovitz

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David Woods, EA, ChFC, CLU wrote:

- quote -

The last time I checked Fairmark.com, he believed it
was an illegal self-dealing transaction, regardless of
whether the sale outside the IRA was a gain or a loss.

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How does the wash rule apply if instead of selling the
shares first and then buying them in another account a
person buys the same number of shares of say CSCO first and
then sells them in one's other account. One would need the
resources to buy them of course but by buying them first
before selling them in a different account - would that be a
way of avoiding the wash rule?

Thanks,
Mickey Sz

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"MTW" <mtwingcpa[at]yahoo.com> wrote:
- quote -

I know Fairmark.com had an opinion article in which it
believed it was a wash sale BECAUSE of the related party
rules.

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

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"Seth Breidbart" <sethb[at]panix.com> wrote:
- quote -

You missed the point completely. The IRA is effectively YOU.

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

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- quote -

I think it might be clearer if you consider that *you* told
*your* IRA to buy CSCO. You are the beneficiary of the
IRA, and you self direct it, so I think you'll agree that
the IRA is somewhat "related" to you? If the IRA fund just
happened to buy CSCO or if the IRA was that of a stranger,
there wouldn't be a related party sale. ed

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David Woods, EA, ChFC, CLU wrote:

- quote -

I disagree. The IRA is not a *party* for the purpose
of the wash sale rule. It is still an illegal self-dealing
transaction, but it's not a wash sale.

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David Woods, EA, ChFC, CLU <dwoods[at]woods-financial.com> wrote:
- quote -

I understand that my IRA is related to me. But I didn't do
a transaction with my IRA. I sold CSCO through Goldman
Sacks on Monday, and on Tuesday my IRA bought CSCO through
Morgan Stanley. If you think they're related because they
might have been the same shares, what if the timing is
reversed?

Seth

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