Portfolio Margin For Checkbook IRA - IBKR

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mjordan313
Posts: 1
Joined: Thu May 12, 2022 10:54 pm

Portfolio Margin For Checkbook IRA - IBKR

Post by mjordan313 »

Hi guys–

Looking to pursue a leveraged strategy in my IRA that I purse with my taxable brokerage account currently.

I have opened an IRA with RocketDollar which now owns a LLC. I would like to open a brokerage account at IBKR in the name of the LLC to get portfolio margin (lets ignore UBTI for now as I buy & hold with limited derivatives trading). IBKR seems to require not only information for the LLC but also requires things like SSN/EIN and other documented information for all members owning 10% or more of the LLC. Since the LLC is owned by the IRA I won't have the exact information their website requires. I have two questions:

1. Has anyone gone through this at IBKR? Is IBKR familiar with the concept of an IRA owning a LLC which will then open a brokerage?
2. Would it just be simpler to open another LLC that is fully owned by the existing LLC and open the brokerage in that name? IT seems they only go 1 level back.

Any thoughts from anyone who has dealt with this would be appreciated.
cheapskatevalue
Posts: 2
Joined: Tue Dec 19, 2023 4:05 am

Re: Portfolio Margin For Checkbook IRA - IBKR

Post by cheapskatevalue »

Hi Friend,

Were you able to get this sorted out? I’m trying to get portfolio margin with IBKR through this kind of arrangement with an SDIRA and I’m wondering if it is possible.

Best,
Cheapskatevalue
whyamihere
Posts: 62
Joined: Sun Oct 22, 2017 4:55 pm

Re: Portfolio Margin For Checkbook IRA - IBKR

Post by whyamihere »

How would this not be a prohibited transaction?

https://www.irs.gov/retirement-plans/pl ... ansactions
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cheapskatevalue
Posts: 2
Joined: Tue Dec 19, 2023 4:05 am

Re: Portfolio Margin For Checkbook IRA - IBKR

Post by cheapskatevalue »

Because if you do it as I intend to, you’re not technically taking a loan. You’re just reducing the account equity requirements. For example, in a regular IRA with no margin if you sell put you’d need to hold the total assigned purchase price in cash.

If in an account with portfolio margin, you might need only to hold about 1/5 of that amount.

It’s nuanced. Read up. It seems highly likely it would work. Futures are allowed at lower margin reqs.
whyamihere
Posts: 62
Joined: Sun Oct 22, 2017 4:55 pm

Re: Portfolio Margin For Checkbook IRA - IBKR

Post by whyamihere »

cheapskatevalue wrote: Wed Jan 03, 2024 8:48 am Because if you do it as I intend to, you’re not technically taking a loan. You’re just reducing the account equity requirements. For example, in a regular IRA with no margin if you sell put you’d need to hold the total assigned purchase price in cash.

If in an account with portfolio margin, you might need only to hold about 1/5 of that amount.

It’s nuanced. Read up. It seems highly likely it would work. Futures are allowed at lower margin reqs.
Share some resources?

When I read up on iBKR they call margin a margin loan. here

So, I hear the point on "you" the individual aren't taking a margin loan, it's actually the LLC your IRA owns applying for a loan, but I don't see how your additional steps can prevent you from fouling a prohibited transaction rule if audited. Have you discussed with a tax attorney, enrolled agent, or CPA? Would the broker even offer margin to a no name LLC?
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