There are many ways to commit tax evasion and this thread has veered into one of the more obscure.
Let's assume a more benign situation where you just want to trade notes in your IRA, like you can trades stocks, ETFs, bonds, etc. Where's the harm/foul?
Couldn't agree more. And until around July last year that was the case (or LC became aware it was not the case at that time).
There was no mention of Folio prohibition during the period I purchased the bulk of my notes in my IRA account (pre-July '13).
Then, for reasons unknown, LC began posting "thy shalt not" on it's web site while doing absolutely nothing to enforce the commandment.
My guess, posted on more than one occasion, is that my Folio account isn't an IRA.
Transfers of notes and money to/from it are taxable events no different than transferring same to/from my personal checking account.
When one looks at their Folio monthly statement it explicitly describes the flow of notes and money between your LC account and your Folio account.
This is a big can of worms that hasn't gone away, though I hope LC and Folio are working together to make it happen.
Who knows when; I was told this isn't a big priority for LC.