I know you can borrow cash for 60 days. But my IRA is 99.9% invested in stocks. It's a traditional IRA.

Can I borrow those shares for 60 days, transferring them to my regular brokerage account and using them as margin collateral, then returning those same shares back to the IRA before the 60 day mark?

I don't need any lectures about the dangers of margin. I'm just curious to know if this is possible.

(My IRA is up about 100% over the last 12 months and my regular account about 300%, so don't worry, I'm fine)

(P.S. as far as Roth vs Traditional, the tax savings from my Traditional went into my regular brokerage account and earned me 300% in a year. Opportunity cost of a Roth makes it worse than Traditional. Case closed.)

  • I don't think it is possible, but anyway, why do that instead of just taking out cash and using that to cover your margin? (Assuming there is any valid reason to do any of this, which is doubtful.)
    – BrenBarn
    Commented Feb 12, 2018 at 6:08
  • @BrenBarn didn’t I just say my IRA is 99.9% invested in stocks? There is no cash. I’m not sure what you mean. Did you read the question? Commented Feb 12, 2018 at 6:14
  • 3
    You can sell the stock inside the IRA, then withdraw the cash.
    – BrenBarn
    Commented Feb 12, 2018 at 6:18
  • @BrenBarn as far as reasons: one would be increase margin collateral in the non-IRA account temporarily. If I transfer $10k of stocks to my margin account, it would allow purchase of another $40k of stocks at 5x leverage ratio. Suppose the stocks I purchase rally 10% in 60 days. I can return the original stock back to the IRA and make an extra $4k on it. Commented Feb 12, 2018 at 6:18
  • 4
    No. It's an IRA. Transactions inside the IRA have no tax consequences.
    – BrenBarn
    Commented Feb 12, 2018 at 6:25

4 Answers 4


No. You don't own the shares, a trustee does. You are the beneficiary. While there is little conceptual difference between borrowing cash from an IRA or borrowing shares from an IRA from the perspective of a beneficiary, there is from the trustee's perspective. Returning identical shares doesn't solve the dollar value of the loan at inception. The loan, for IRS purposes, is fixed in dollar amount. If the shares would decline then simply returning the shares wouldn't satisfy the loan amount. Likewise, returning excess would constitute a contribution. Additionally, the trustee would have to have the shares retitled, which takes time, and then must be retitled back into the trustees name to close.

  • 1
    While I agree with the complexities of loaning shares vs loaning cash, The trustee does not "own" the IRA. They are merely "holding" it for the true owner, the individual.
    – D Stanley
    Commented Feb 12, 2018 at 19:49
  • Actually, the custodian holds legal title, but for the benefit of the account holder. This is per CFR Title 26 Vol 5 § 1.408-2 and follows from court rulings such as Goodwin v. McMinn, 193 Pa. 046, 44 Atl. 1094, 74 Am. St. Rep. 703; Beers v. Lyon, 21 Conn. 613; Seymour v. Freer, 8 Wall. 202, 19 L. Ed. 300 Commented Feb 12, 2018 at 22:01
  • Oops, also defined in 408(n) of same title of CFR. Commented Feb 12, 2018 at 22:04
  • Fair enough - I was more concerned that the correct interpretation of your answer was "you can't because you don't really own the shares". The complexities with borrowing shares are more applicable IMHO.
    – D Stanley
    Commented Feb 12, 2018 at 22:42
  • No, shares cannot be returned to the IRA: by law, all IRA contributions (as well as returns of "loans") must be cash contributions. One cannot contribute stock or bonds or real estate to an IRA; only cash. Commented Feb 13, 2018 at 5:12

Assuming this is a plan to use the 60-day rule for withdrawing from an IRA and re-contributing within 60 days, your simplest method would be to just cash out some of the investments ion your IRA and withdraw the cash once it settles. There are no immediate tax consequences since it's within an IRA.

However, be very aware of the risk if something goes wrong. If you do not replenish the IRA within 60 days, you will owe taxes AND a 10% penalty. If your trade goes against you, you will have to handle the margin call plus replenish the IRA. This seems like a VERY RISKY move.

You can also only do any kind of IRA "rollover" once per calendar year, so you can't "borrow" again to bail you out or for any other purpose.


Some IRA custodians allow distributions of shares (of stock or mutual funds) held within an IRA but legally, it is as if the custodian sold the shares at the close of market price, distributed the cash, and you promptly bought the same number of shares outside the IRA at the same close of market price, all without paying any brokerage fees or commissions on these transactions. The IRA custodian records this as a distribution of cash in the amount of the market value of the shares at the close of market price on the day of the distribution, and this is your basis in the newly acquired shares outside the IRA.

All this is fine and dandy, but the important point here is that you cannot return the shares to the IRA. By law, all contributions to an IRA (including return of money taken out of an IRA within the 60-day period) must be contributions of cash, not shares or bonds or real estate or whatever. Now, if those shares you took out appreciate considerably within those 60 days, the cash that you return to the IRA will not buy the same number of shares within the IRA. So, you get taxable income outside the IRA but your IRA ends up poorer than it would have been if you hadn't taken the "loan" at all and just let matters be. In short, your present self has robbed your future self. Whether this is a good thing or not is a matter on which reasonable people might well have different opinions.


I've never heard of anything like this previously, however, some plans may allow it. Most plans do not even allow the ownership of individual stocks, but some do. The one I had that allowed this, it was a kind of a big deal to transfer money into and out of the brokerage account and induced fees going back and forth. It was the kind of thing a person wanted to do seldom not frequently. That was the brokerage account that was inside the 401K.

Now you may have an individual 401K that may allow the purchase of individual stocks. However, the things allowed are up to the individual custodians. For example Fidelity does not allow ROTH 401K or loans in their plan, Etrade allows both.

So the key is to ask the plan administrator. So even if was allowable by the IRS (and I doubt it is), the individual plan may not allow it.

To me the only way to accomplish this is to borrow from your 401K, deposit the money into your brokerage, and have that satisfy your margin requirements. It may not seem strait forward, but I feel like that is your best bet for getting this done.

  • 1
    I'm guessing the "borrowing" involves cashing out part of the IRA then re-contributing it via the 60-day rollover rule.
    – D Stanley
    Commented Feb 12, 2018 at 16:42
  • I think different custodians do it differently, but I am not sure.
    – Pete B.
    Commented Feb 12, 2018 at 17:06

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