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> Even though this arrangement is between related parties and what
> would be a disqualified person, the transaction would not be
> prohibited if "the compensation were reasonable for services
> provided, and if the person who received the compensation was not
> already on salary from the company that had established the plan".
So it sounds like a fee (20% or whatever) would be *required* for
this to work.
> As long as the compensation was reasonable, and the person trading
> the plan was not collecting double salary there is nothing
> apparent that flags it as a prohibited transaction..
Hm. I've lost track of the players here. In my situation there are
three entities:
IRA: Rollover IRA from the 401(k) from my previous employer
Trader: My corporation, the entity who would trade the IRA
Me: 49% stockholder & officer in the corp (my wife owns the
other 51%), the person actually executing trades for the corp,
and beneficiary of the IRA
So the "person trading the plan" in this case would be my corp? I'm
not sure how the "double salary" warning applies here. "The company
that established the plan" is moot, I think, as it is currently a
rollover IRA. (Though I've considered converting it to a corporate
retirement plan.) I draw a salary from my corp, but I am a
shareholder and officer of the corp, not the actual trader. In fact
"the 'person' receiving the compensation" and "the company that
established the plan" would seem to be one and the same here!?!?
What a mess.
> As far as your second question goes, with the CTA regisrtation
> issue, I don't believe unless a certain amount of money is
> managed, or if the number of accounts exceeds a certain amount,
> that registration is necessary.
Not for compliance with NFA regs, no. But for my FCM at least, I
discovered they absolutely will not cut a fee check to an external
entity unless that entity is a genuine CTA. Which would seem to put
a rather large kink in the whole plan. You can have a CTA trade your
IRA, but you can't do it yourself. Sheesh.
It sounds to me as though the "trading futures in an IRA" idea is a
recipe for IRS disaster, whether you do it as an individual or
through a corp/LLC. Guess I'd better stick my IRA into mutual funds,
and concentrate on building my retirement with non-IRA money. :-\
No, wait, there's also the option to trade the IRA but write it off
as "investing" instead of "trading." Which means you have to divide
all your expenses between Sched C and wherever. Also very messy. Hm.
Gary
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