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Taxes on Self-Directed IRA Margin

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Market Wizard
Boca Raton
Trading Experience: Advanced
Platform: Variety
Broker/Data: Optimus Futures, LLC
Favorite Futures: Futures
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alexanderlmetcalf View Post
I currently trade futures ETFs with my IRA, but was considering trading the straight futures with a self-directed IRA via Midland. Then I came across a note on another website that said that I had to pay taxes on borrowed money. So here's my question to someone on this forum who already does this, if I trade at full-margin (e.g., 50% of the contract is borrowed), then do I pay taxes on that 50%? I believe the answer is yes, but I would like to hear from someone who already does this.

When you trade Futures, you do not "borrow" rather use the margin you have in your account. As oppose to equities that may have borrowing costs when you short or additional financing when you use extra leverage, the futures contract does not have such costs. You use Leverage in futures, and the number of contracts you can legally hold depends on the risk capital in your account.

Since you are using IRA funds, be aware that certain FCMs may require over and above the exchange margin

Thank you,
Matt Z
Optimus Futures

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