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  • Covered Calls Premiums in Roth IRA - Are they taxed and how?

    From alex@21:1/5 to All on Sat Jul 17 18:10:17 2021
    How premiums received from selling Covered Calls inside an Roth IRA are taxed? And if yes, how? As regular income, where are they reported, ie 1099?
    Thanks, Alex Turchina

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  • From Stuart O. Bronstein@21:1/5 to alex on Sat Jul 17 20:58:12 2021
    alex <aturchin45@gmail.com> wrote:

    How premiums received from selling Covered Calls inside an Roth
    IRA are taxed? And if yes, how? As regular income, where are they
    reported, ie 1099?

    As far as I can tell, in general no IRA earnings are reported at any
    time. They are just taxed as ordinary income when they come out of the
    IRA. This also applies to capital gains - if income would be taxed as
    long term capital gain if it weren't in the IRA, it's taxed as ordinary
    income when it comes out of the IRA.

    --
    Stu
    http://DownToEarthLawyer.com

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  • From JoeTaxpayer@21:1/5 to Stuart O. Bronstein on Sun Jul 18 06:26:02 2021
    On 7/17/21 8:58 PM, Stuart O. Bronstein wrote:
    alex <aturchin45@gmail.com> wrote:

    How premiums received from selling Covered Calls inside an Roth
    IRA are taxed? And if yes, how? As regular income, where are they
    reported, ie 1099?

    As far as I can tell, in general no IRA earnings are reported at any
    time. They are just taxed as ordinary income when they come out of the
    IRA. This also applies to capital gains - if income would be taxed as
    long term capital gain if it weren't in the IRA, it's taxed as ordinary income when it comes out of the IRA.

    Yes, all correct for traditional IRA. This is a Roth. Any legitimate
    trading within the Roth is tax free, as are withdrawals, within the
    rules of Roth.

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2011) - All rights reserved. >>
    << ------------------------------------------------------- >>

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  • From John Levine@21:1/5 to All on Sun Jul 18 15:42:41 2021
    According to JoeTaxpayer <JoeTaxpayer@comcast.net>:
    Yes, all correct for traditional IRA. This is a Roth. Any legitimate
    trading within the Roth is tax free, as are withdrawals, within the
    rules of Roth.

    It sure is. Peter Thiel put 1.7m shares of Paypal into his Roth in 1999, underpricing them
    at 1/10 cent each (arguably underpricing them which would be illegal.) They're worth
    $5 billion now, tax free.

    https://www.theguardian.com/technology/2021/jun/24/billionaire-peter-thiel-5bn-tax-free-savings

    --
    Regards,
    John Levine, johnl@taugh.com, Primary Perpetrator of "The Internet for Dummies",
    Please consider the environment before reading this e-mail. https://jl.ly

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    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2011) - All rights reserved. >>
    << ------------------------------------------------------- >>

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  • From Roger Fitzsimmons@21:1/5 to John Levine on Wed Jul 21 20:01:03 2021
    On Sunday, July 18, 2021 at 3:46:46 PM UTC-4, John Levine wrote:
    According to JoeTaxpayer <JoeTa...@comcast.net>:
    Yes, all correct for traditional IRA. This is a Roth. Any legitimate >trading within the Roth is tax free, as are withdrawals, within the
    rules of Roth.
    It sure is. Peter Thiel put 1.7m shares of Paypal into his Roth in 1999, underpricing them
    at 1/10 cent each (arguably underpricing them which would be illegal.) They're worth
    $5 billion now, tax free.

    https://www.theguardian.com/technology/2021/jun/24/billionaire-peter-thiel-5bn-tax-free-savings

    --
    Regards,
    John Levine, jo...@taugh.com, Primary Perpetrator of "The Internet for Dummies",
    Please consider the environment before reading this e-mail. https://jl.ly

    I wrote some covered calls in my Roth a few years ago. I didn't "report" them in any way. It just folds into the account.

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2011) - All rights reserved. >>
    << ------------------------------------------------------- >>

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