Steve2 Elite    Posts: 750 Joined: 10/11/2012 Location: Annapolis, MD  User Profile | I've been researching this quite a bit. Both IB and TD Ameritrade support IRA Margin Accounts. These are LIMITED margin accounts designed to comply with IRS rules for IRAs. As such, you cannot borrow funds (there really isn't any margin) and assets in your account cannot be used as collateral. So you can't perform any type of transaction that would require borrowing funds (e.g., shorting a stock). The purpose of these accounts is to give you a few more trading options than you get with a cash account and enable you to trade with unsettled funds (i.e., avoid the Reg T-3 waiting period). When you trade with unsettled funds, you have to make sure your trades are sequenced properly so that you never have a negative balance as each trade settles. If you go to IB's home page and type IRA MARGIN into the search box, you will see their documentation on IRA margin accounts. The following link will show you TD Ameritrade's margin disclosure document. The last section documents margin limitations in IRA accounts. https://www.tdameritrade.com/retail-en_us/resources/pdf/AMTD845.pdf I have been unsuccessful in finding any IRS or SEC related documentation that comments one way or the other on IRA margin accounts. I did find one website that documented some of the history of this. Here's the link http://www.traderstatus.com/faq.htm Scroll down to FAQ 5.9. Note that I can't vouch for the website or the accuracy of the information. I would definitely check with you tax advisor before proceeding. I talked with mine and he initially said "no way" but after looking at the documentation said that it met IRS requirements. My only concern would be how well the broker is setup to prevent you from violating the rules (like shorting stocks or having an incorrect sequence of trades that results in a negative account balance). Hopefully that would be bullet proof but I'm not sure. Steve [Edited by Steve2 on 4/16/2013 9:32 AM] | |
