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Strategies & Market Trends : IRS, Tax related strategies--Traders -- Ignore unavailable to you. Want to Upgrade?

To: upanddown who wrote (494)	9/17/1998 4:20:00 PM
From: Colin Cody	Read Replies (2) \| Respond to of 1383

John, No, you may NOT have the IRA purchase the stock by exercising the options held outside of the IRA. . The option must be exercised by its HOLDER. Therefore you'd need to transfer/sell the option to the IRA and in turn the IRA could exercise it. . BUT doing so would disqualify the IRA, retroactive to the first day of the calendar year, making the entire IRA balance subject to tax and the premature distribution rules. . As an alternative you MIGHT be able to sell the option on the OPEN MARKET and have the IRA purchase the option on the OPEN MARKET. Doing so might cause you to realize a gain of loss personally. I am of the opinion that a loss this way is subject to the Wash Sales rules, although there are many people who say as long as the retirement account is an IRA rather than a Pension Plan, that wash sales do not apply. . Colin