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I haven't read the IRS regulations on margin or borrowing FROM an IRA,
but you can certainly margin and borrow IN an IRA with a futures
account. I currently trade futures in my IRA account. The only
restriction is a higher minimum reserve that must be kept in cash or
T-Bills. All brokerage houses that I investigated required a minimum
of 1/3 of the account's value must be retained in cash or T-Bills.
Some brokers (Jack Carl for one) did not allow me to invest the cash
in T-Bills. Other brokers (Lind-Waldock for one) required a higher
minimum reserve.
To the best of my knowledge, you can't directly Short a stock, option
or anything other than a future in an IRA. You can buy a mutual fund
that Shorts (ex: Rydex Ursa), but the IRA owner can't go Short.
Regardless, you can margin and go Short with futures in an IRA. I'm
certain of this, because I do it and I honestly report it to the IRS.
Yes, I've been audited.
Ross Kovacs
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