Steve2 Elite    Posts: 750 Joined: 10/11/2012 Location: Annapolis, MD  User Profile | Here's my latest go round with IB customer support on their IRA margin account: Q: Thanks for the response but the information provided was not what I was after. I've read the material on the website and understand how your IRA Margin account works. I'm trying to ensure that this type of account meets IRS rules for IRAs and that there is no risk of rolling an IRA into an IB IRA margin account and then losing the tax deferred status of the funds. This could happen if the IRS has not approved this type of account or if there is anyway that IB software might allow me to borrow funds if I enter an incorrect trade sequence (e.g., buying before selling when I'm already fully invested) or enter a prohibited trade (e.g., shorting a stock). If I accidently attempt something like this will the IB software prohibit me from doing this? Also, could you tell me how many years you all have offered IRA margin accounts? IB Response: Thank you for your follow up question. Interactive Broker's software does not allow leverage in the IRA Margin accounts. The feature of this type of IRA is the immediate release of funds, instead of waiting for a normal cash settlement of T+3 on an Equity trade, and T+1 on an Option trade. The IRA Margin account has been offered for over 5 years now at IB. I hope this helps. So, they still haven't provided any evidence that this type of account has been approved by the IRS. But given that they have offered it for 5 years, the IRS and SEC have had plenty of time to whack them if it violates any rules. So, I think this is just a clever (and legal) way of getting around T+3. | |
