Relay-Version: version B 2.10 5/3/83; site utzoo.UUCP Posting-Version: version B 2.10.1 exptools 1/6/84; site ihldt.UUCP Path: utzoo!watmath!clyde!burl!we13!ihnp4!ihldt!jhh From: jhh@ihldt.UUCP (John Haller) Newsgroups: net.taxes Subject: Re: Can you borrow from an IRA? Message-ID: <2271@ihldt.UUCP> Date: Mon, 5-Mar-84 22:19:37 EST Article-I.D.: ihldt.2271 Posted: Mon Mar 5 22:19:37 1984 Date-Received: Tue, 6-Mar-84 06:55:12 EST References: <6845@cca.UUCP> Organization: AT&T Bell Labs, Naperville, IL Lines: 13 You cannot borrow from or against an IRA in the traditional sense. However, if you close one IRA, you have 60 days to place the money in another IRA. The money is in your hands during that time. If you use this method, you can only switch IRAs once a year. If you have te check from the first IRA made out to the trustee of the second IRA, you can move the money as often as the trustee allows. If you use an IRA as collateral for a loan, you have made a `prohibited transaction', and the IRS considers that you have withdrawn the entire amount. This subjects you to taxation on all the funds in the IRA, plus the 15% excise tax for early closing of the IRA. John Haller