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Can you have margin on an IRA account?

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According to IRA regulations, if any part of an IRA is used as collateral, the entire IRA is considered to be distributed. Distribution of such accounts are subject to income taxes and an additional penalties. This is important because margin accounts require that you pledge your account as collateral. Your attempt to convert an IRA account into a margin account will nullify it's "qualified" status. It is for this reason that investment firms will not provide margin for a retirement account.


Also, you are not allowed to have/keep a debit balance in a IRA account


***Revision
Updated as Feb. 5, 2011

Select few brokerages will grant margin on IRA accounts.
However, the margin capability will not be allowed leverage.
The alternative purpose for seeking margin account is to avoid the settlement period (3 days, in which, the proceeds and principal cannot be used).
Interactive Brokers and TD Ameritrade allow margining IRAs for settlement avoidances, only. This service has been approved be the Securities Exchange Commission.

Bottom line: YES, you can margin an IRA account. NOT, for leveraging purposes.
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