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Messages - Joe6Luck

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91
Actually, you are claiming short term capital loss on the taxable account, which can reduce your taxable income.


Hmmm. I don't see how buying a $25 note in your taxable account and then selling it at $50 to your Roth account would create a capital loss in the taxable account. It seems like a gain to me.

It is the other way. Buy $25 notes in Roth account and sell them at $50/note to a taxable account.

92
Investors - LC / Platform -> Folio Rotation?
« on: May 24, 2013, 12:49:18 PM »

That's the idea. Currently my entire portfolio is about 40k, I'd do this with about 4,000~ worth of notes. Roughly 10%.


Do you have a way to automatically sell such notes? If you sell $4000 each month with a 2% profit, that will be $80/ month. I am afraid that it might not be worth it if you need to spend, say, 10min per day or 5 hours per month on it (thinking about it, checking status, and manually setting it, etc.).

93
I am doing some research online. This seems like self-dealing that is prohibited by IRS. Does anyone have more knowledge in this aspect?

http://www.ehow.com/about_7479442_self-dealing-roth-ira.html

94
Hi, I saw a post on a different website, which is about selling notes from a Roth IRA lending club account to a normal account. The procedure is as follows

* Open two lending club accounts (one is a Roth IRA account, and the other one is a normal account)
* Buy notes in Roth IRA account (say $25 per note)
* Sell the above notes with a much higher price (say $50) on the foliofn platform. The price is set to be so high that nobody else will buy it
* Buy those notes from one’s normal lending club account

In this way, one will lose 1% transaction fee (1% of the $50 sell price, or 2% of original $25 purchase price) but effectively move funds to a Roth IRA account. With more funds in Roth IRA, one can buy more notes and avoid paying tax going forward. In addition, it seems to me this kind of transaction leads to investment profit in the Roth IRA account (no tax) and investment loss to the normal account (which can be claimed during tax season).

This seems too good to be true (except for the 2% fee as mentioned above) and I suspect the above procedure must have missed something that will cause trouble. Can anyone take a look at this and figure out what could be wrong with it? Thanks.

Joe

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