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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
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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transaction', and the IRS considers that you have withdrawn the entire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