Income Taxes and Record Keeping ( tax ) Message Board

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Strategies & Market Trends : Income Taxes and Record Keeping ( tax )

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To: Dr. D who wrote (1707)	1/2/1999 6:31:00 PM
From: mod	of 5810

I don't believe there are any explicit IRS rules about day trading a Roth or any other kind of IRA. However, rumor has it you are not allowed to operate a "trade or business" within an IRA. But since day trading can result in trader status, and is therefore reported on a Schedule C as a "business", the question is whether this prohibition could be applied to day trading in an IRA account. Theoretically, if you do something you're not supposed to within an IRA (like buy Beanie Babies for investment purposes), there can be severe penalties. I don't know if the IRS has ever ruled on this, or whether it is just a hypothetical concern. Colin or Kaye, do you know if there have been any court cases on this? I actively trade through both a Roth and a SEP-IRA, in addition to taxable accounts, so I'd rather not have to worry about this potential problem.

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