Finance

Have Finance Questions? Ask a Financial Expert Online.

Ask an Expert,
Get an Answer ASAP!

Finance
This answer was rated:

I have an IRA account that is going to allow me to trade futures.

A friend of mine is...
I have an IRA account that is going to allow me to trade futures. A friend of mine is a very experienced and successful futures trader. He is going to manage the trades in my IRA account for a % of the gain he creates in the account. Can I transfer some of the gain out of my IRA account to pay him? If so, what would be the best way to structure the transaction to limit my tax/penalty hit?
Show More
Show Less
Ask Your Own Finance Question
Answered in 3 minutes by:
11/15/2013
Megan C
Megan C, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 16,581
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
Verified

Megan C :

Thank you for your question. My name is XXXXX XXXXX I will be happy to help you tonight

Megan C :

How are you doing?

Megan C :

The IRS allows you to pay investment advisory expenses to be paid directly out of the IRA account

Megan C :

So, you would not have to take funds out and pay a penalty to pay your friend the investment expense

Megan C :

However the investment advisor cannot be related to you

Customer:

The investment advisor is not related to me.

Megan C :

Okay ... you cannot have a transaction with a related party or you can disqualify the entire retirement account. But, the account can pay its own investment fees

Customer:

Wouldn't I take a tax hit of say 40% when I pull out enough to pay him?

Customer:

Also, I would have to 1099 him, right?

Megan C :

No you are not pulling money out - you are paying an investment expense. If the fee is paid directly to him from the IRA it's not a withdrawal. You are not taxed on this.

Megan C :

Also, you do not have to send him a 1099 unless you are a business. Individuals do not have to file form 1099

Customer:

I am trading the an IRA investment account - Ameritrade. Would I instruct them to write him a check for his commission fee?

Megan C :

Yes, you would do that. I assume this is a self directed IRA

Customer:

Yes, it is self directed.

Customer:

Accounting-wise I really don't need to report anything because it all comes out of my IRA account, correct?

Megan C :

Yes, so you would have them pay him the fee. The IRS allows one of two things; either pay him directly from the IRA, but the fee has to be for investment advisory fees. Either that, or you can pay him yourself and deduct the fees.

Megan C :

So, nothing shows up on your tax return if you pay him directly out of the IRA

Customer:

Sweet!!! You have been EXTREMELY helpful!!! Can I get you again if I need another question in the next few days? You were great!!

Megan C :

Yes, you can. Let me give you my direct link

Megan C :

http://www.justanswer.com/finance/expert-myvirtualcpa/

Megan C :

Go to that site, enter your question below my picture

Megan C :

And, before you leave tonight, please rate my response as "excellent"

Customer:

Will do. My friend who is trading might have a question or two for you. Thanks again!

Megan C :

Okay please do come see me again and send them my way. I appreciate it

Megan C :

The rating feature is located along the bottom of your screen. 3-5 gives me full credit for assisting

Megan C
Megan C, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 16,581
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
Verified
Megan C and 87 other Finance Specialists are ready to help you
Ask your own question now
Ask Megan C Your Own Question
Megan C
Megan C
Megan C, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 16,581
16,581 Satisfied Customers
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

Megan C is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Rakhi Vasavada

Rakhi Vasavada

Financial and Legal Consultant

2,608 satisfied customers

Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years

Megan C

Megan C

Certified Public Accountant (CPA)

16,581 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

Manal Elkhoshkhany

Manal Elkhoshkhany

Tutor

1,919 satisfied customers

More than 5000 online tutoring sessions.

JKCPA

JKCPA

CPA

844 satisfied customers

Bachelors degree and CPA with Accounting experience.

Eric

Eric

Financial Manager

559 satisfied customers

Loan servicing, counseling and real estate expert. Foreclosure Expert and Financial Planner.

R. Klein, EA

R. Klein, EA

Accountant

480 satisfied customers

TurboTax Expert. QuickBooks Certified Pro Advisor

Dimitry K., Esq.

Dimitry K., Esq.

Attorney

332 satisfied customers

NASD Licensed Rep, 1997-2001, Business Attorney

< Previous | Next >

Related Finance Questions
I inherited my father's IRAs. I have accounts with Fidelity
I inherited my father's IRAs. I have accounts with Fidelity and Schwab. One of my Schwab accounts is titled Inherited; the other is listed as a Roth. The Fidelity account is listed as an IRA. My quest… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I have a question on SEP IRAs? i have income from both a
i have a question on SEP IRAs? i have income from both a single member LLC and straight up schedule C self employment income. … read more
abci168
abci168
Principal
27 satisfied customers
Please help, I have a seld-directed IRA and I have questions
Please help, I have a seld-directed IRA and I have questions regarding rollovers from my traditional IRA … read more
Chad CFP ®
Chad CFP ®
Certified Financial Planner(R), Pro
Master\u0027s Degree
723 satisfied customers
I had a IRA disallowed for paying property taxes directly. A
I had a IRA disallowed for paying property taxes directly. A rental home was sole asset. I sold the property 11/16. IRA started 3/6/12 as a rollover for $77,468. Property sold for $23,970 after taxes … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I have a roth ira account with a bank that i also invest
I have a roth ira account with a bank that i also invest money and buying stocks. I want to know if i can attach a credit card to that account so i can buy bigger quantity of stocks straight from cred… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I am interest in having my client conversion of Trad IRA to
I am interest in having my client conversion of Trad IRA to Roth IRA. Does the transfer have to be in cash or can we transfer securities and current market value?This is how I do the client Trad IRA R… read more
TaxRobin
TaxRobin
Vocational, Technical or Trade School
1 satisfied customers
Quick Question on IRA withdrawals and deposits. Here is the
Hi. Quick Question on IRA withdrawals and deposits. Here is the scenerio: Withdrawals were made $3k/withdrawal for bills, etc., on the following dates: Nov 11, 2016 Nov 20, 2016 December 3, 2016Total … read more
TaxRobin
TaxRobin
Vocational, Technical or Trade School
1 satisfied customers
I have a SEP IRA with a good amount of money in it. My
Hi, I have a SEP IRA with a good amount of money in it. My spouse is my beneficiary for this account. If I die, are there tax consequences for my spouse? How would this work? Thank you… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,458 satisfied customers
I have a question regarding IRA funds. I am refinancing a
I have a question regarding IRA funds. I am refinancing a rental and would like to get into a 15 year fixed loan. For that I need to put money in. Can I take the money out of my IRA? Will I be taxed this year? … read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Ministers Retirement Plan. How is a Roth IRA setup for the
Ministers Retirement Plan. How is a Roth IRA setup for the pastor? Want tax free future income. What would be the best vendor to setup this account. Is there such an account under 403?… read more
TaxRobin
TaxRobin
Vocational, Technical or Trade School
1 satisfied customers
I need to withdraw from an ira and was wondering if I'm in
I need to withdraw from an ira and was wondering if I'm in the 25% tax bracket, should I have 25% federal and 25% state taxes withheld. the state tax part confuses me. … read more
TaxRobin
TaxRobin
Vocational, Technical or Trade School
1 satisfied customers
This question is about my IRA. It matured last month, and I
this question is about my IRA. It matured last month, and I would like to know if there would be a penalty and what it would be if I took the funds out of this CD account and put them into a Savings I… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Is an individual retirement annuity considered an Ira?
Is an individual retirement annuity considered an Ira? Trying to help my mother move this to her IRA that she has at another institution. Never heard of the term before but it has the acronym of an Ir… read more
Mark Taylor
Mark Taylor
Certified Public Accountant
Masters
2,217 satisfied customers
I have a question regarding transfering an IRA as your own
I have a question regarding transfering an IRA as your own from a spouse. Complicated question regarding an annuity. Did a transfer form to move an ira of my deceased wife's to my ira at another finan… read more
TaxRobin
TaxRobin
Vocational, Technical or Trade School
1 satisfied customers
I have an IRA that I am not currently contributing to. My
I have an IRA that I am not currently contributing to. My husband can take early retirement money of about $600 a month. He's 51.5 years old right now. Would it make sense to take that money and inves… read more
Matthew Breecher
Matthew Breecher
President
MBA (Graduate Legal Studies)
285 satisfied customers
Can you explain what a "Qualified Ira" is? Or a qualified
Can you explain what a "Qualified Ira" is? Or a qualified Annuity? I think that qualified plans are bot taxable when withdrawn? Thank you Fred… read more
TaxRobin
TaxRobin
Vocational, Technical or Trade School
1 satisfied customers
My husband's ira was in an annuity with Pacific Life. He
My husband's ira was in an annuity with Pacific Life. He passed away in January and I put the IRA in my name, but I think I would like to take the money out but I don't think I will receive the full a… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Currently have 205k in ira contribute 2000year Would an
Currently have 205k in ira contribute 2000year Would an annuity be of any benefit vs ira Employer do esnt offer retirement plan… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,458 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x