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Gold/Mining/Energy : Big Dog's Boom Boom Room
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To: Elroy Jetson who wrote (84122)5/6/2007 6:27:04 PM
From: mach  Read Replies (1) of 206326
 
I think it may be possible to have a margin account using IRA funds, although it is more complicated than just having an IRA account at with your broker. The IRA rules allow investment in anything except life insurance or collectables. There are a number of IRA custodial firms that allow IRA investment in anything that does not violate the IRA rules and as such allow much more leeway than your typical brokerage IRA. These are sometimes called "self-directed or real-estate IRAs" (a google search will turn up info) and are usually geared towards owning real estate in your IRA.

To obtain a margin account with your self-directed IRA funds, you would need to set up a single member LLC which will be wholly owned by your IRA. Your IRA funds the LLC with a capital contribution. The LLC can then open a margin account at a broker that allows business accounts to trade on margin, i.e. Interactive Brokers will allow this.

Of course there is an up front expense to do this (setting up the LLC) and the annual custodial fee can run a few $100/year at minimum, so this approach would only make sense for a large account and a strong desire to trade on margin with your IRA funds.

I would be interested to hear if anyone has tried this approach.

Mark
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