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Buttercoins OP t1_iyemagl wrote

I understand it's a bad position to be in. But, look at it from a spirit of the law perspective: he was using it as a retirement account. He did not draw from the initial gain to his checking account (just as if it had been a retirement account). I know the solution isn't straightforward, I suppose what I'm looking for is the best way to approach the IRS to negotiate this, because the guy is getting screwed and will be quite destitute if he has to liquidate his account to cover the tax implications of one trade.


Mysunsai t1_iyemwh4 wrote

The “spirt of the law” is that you can take advantage of specific benefits in exchange for specific restrictions. Taking advantage of the benefits without any of the accompanying restrictions is the opposite of the spirit.

Stock traders don’t generally move money back and forth between checking and brokerage, he’s nothing special.


Buttercoins OP t1_iyeohag wrote

I'm saying he acted within all the same bounds as he would have had to, had it been an IRA, and for the same reasons: retirement.