Purchasing and exercising stock options in an IRA

Submitted by Jake Parkhurst on Tue, 2022-01-18 00:57

TLDR: Can I purchase and then exercise stock options from a startup within my IRA? If so, how?

Good afternoon,

I have looked at several posts and it seems that an IRA cannot exercise my stock options for me (links below).
https://irahelp.com/forum-post/29657-optionwarrant-exercise-inside-ira
https://irahelp.com/forum-post/64139-non-qualified-employee-stock-option-inside-roth-ira

That said, I will lay out my circumstances and what I would like to do in case anyone has some advice.

I recently joined a startup and was given options. I would love to exercise these options now while we are still young (read: cheap stock) and put these in my IRA. That way, if we are successful, I can sell those stocks and diversify their value with minimal taxation. Is this possible, and if so can anyone direct me to resource to figure out how to do this?

Thank you for the help,
Jake



Submitted by Alan - IRA critic on Wed, 2022-01-19 01:51

 You can’t transfer options awarded to you to your IRA. Contributions to an IRA are limited to cash. 

Submitted by Jake Parkhurst on Wed, 2022-01-19 07:03

10-4! Thank you for the (crystal) clarity Alan. Message received: I can only put cash into an IRA. That said, can I use the cash in my IRA to purchase the stocks while they are still low in value? The following website suggests that indeed I can, however, I need to hire a custodian. Is that correct? https://www.ira-basics.com/what-types-of-investments-can-you-use-in-an-ira/  Thank you again for the help, Jake

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