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Strategies & Market Trends : Income Taxes and Record Keeping ( tax ) -- Ignore unavailable to you. Want to Upgrade?

To: Kurt N who wrote (1087)	5/16/1998 10:23:00 PM
From: Colin Cody	Respond to of 5810

Oh, I'm not an IRA expert, but my recollection is you MAY NOT "borrow" even one cent for even one day. A debit account balance means you borrowed! Therefore due to the negligence of a brokerage the account is permanently disqualified. (big deal) -- because we're only talking a ROTH. Here's my thoughts. #1 I think it is REAL simple to have the brokerage CANCEL the original confirmation, and then REISSUE it as of THE SAME TRADE DATE. My Broker does this ALL THE TIME in my account. My broker makes many small errors: wrong commission, or using cash acct rather than margin acct, or wrong stock price, whatever... They simply cancel and rebill. On my confirmations they even have a box for this: "process date" as well as the regular "trade date" and "settlement date" boxes. #2 if this isn't done to your satisfaction, CLOSE THE ACCOUNT, and open a NEW ROTH IRA with $1,500 CASH. Of course you'll be "out" the selling commissions in the old acct and the buy commissions in the NEW ROTH. But tell the broker they have to eat those charges... maybe they'll give you two "free trades" down the line to make up for it. Just make SURE you use the free trades in the IRA account. If you took them PERSONALLY, that in itself is a prohibited transaction that would disqualify the new Roth!! (g) BTW you may NOT open an IRA with (disqualified) stock, you MUST open it with CASH. Either way, this is no biggie. If the stock went UP in value in the old Roth, you WILL have to pay taxes and penalty on the profits over the $1,500 contribution. So in that case, PAY an exit commission, who cares, it'll be less tax/penalty to pay. Just make sure they "give" your new IRA something to make up for the faux pas. Colin