A: Because it reverses the flow of the dialogue.
Q: Why is top-posting frown on in newsgroups?

David Woods, EA, ChFC, CLU wrote:

- quote -

This IS a confused issue. When "Viatical Settlements: An
Investor's Guide" was published in 1998, we repeatedly
stated that life insurance is a prohibited investment for
IRAs. Since then, we have heard from some investors that IRS
sent them statements for taxes and penalties on what IRS
considered to be a complete withdrawal of the funds that
were rolled over to the new creation, the viatical IRA (or
viatical Roth IRA). More recently, financial columnist Jane
Bryant Quinn tried to get a definitive answer. We still do
not have an absolute clarification.

The conservator needs to do this. As David Woods stated, he
should not send the 1098-B to the IRA trustee. The IRA
trustee also has a responsiblity to get this clarified by
IRS. Without an IRA trustee in the picture, investors would
not have been manipulated into using their IRA funds.

Gloria Wolk
consumer advocate and author
"Viatical and Life Settlements: An Investor's Guide"
(available May 15, 2005)
http://www.Viatical-Expert.net

Moderator:
In spite of Ms Wolk's top-posting which I stopped and
corrected, I reviewed her first edition and found
nothing inaccurate in it.

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MTW wrote:
- quote -

I puzzled over that too, but from what was said above,
it's possible she meant "invested some of our IRA funds..."
meaning after having withdrawn and paid tax on them. I
dunno.

ChEAr$,
Harlan Lunsford

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ellenbu[at]frontiernet.net wrote:

- quote -

Question (for anyone): Is investment in viatical contracts
"legal" for IRA accounts? I thought that investments in life
insurance were prohibited.

MTW

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"ellenbu[at]frontiernet.net" <ellenbu[at]frontiernet.net> wrote:

- quote -

No.

- quote -

You don't HAVE a tax loss. You have an investment loss
inside an account with a gain.

- quote -

Well hiring someone to point out to the conservator that you
don't send a 1099-B to an IRA is a good start.

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

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<ellenbu[at]frontiernet.net> wrote:

- quote -

There is no such thing. You just have less to withdraw.
I'm assuming here that you never made nondeductible
contributions.

<snip
- quote -

This is wrong. Your husband didn't own the securities, the
IRA did, and that's where the conservator should be sending
the money.

--
Phil Marti
Clarksburg, MD

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ellenbu[at]frontiernet.net wrote:

- quote -

The conservator needs to be made aware that he is dealing
with an IRA as owner. IRAs do not recognize capital gains or
losses.

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My husband and I invested some of our IRA funds in
viaticals. The District Court of the State of Oklahoma
stepped in and seized the funds of all investors due to a
problem with the company that sold the viaticals to us. The
viaticals were then assigned to a conservator who sold them
to another company, which reduced their value by 50%. My
husband is 72 and is required to withdraw a portion of his
IRA's. My question is, can we claim capital loss on an IRA?
Since the IRA funds are taxable, would we show the original
value of the viatical (so the tax would be assessed) and
then show a capital loss for the 50% reduction in value, or
is there no way of recouping any of our loss on this
investment? The conservator is sending the funds directly
to my husband as they mature and reported them on a 1099B,
which doesn't show them as IRA funds. Thanks for any help we
can get with this sorry mess.

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