de minimus tax rule on bonds purchased with a Roth IRA account
If a client wants to purchase the following municipal bonds within their Roth IRA account does the de minimus rule apply:
1. Zero Coupon municipal bond – secondary market.
2. discounted below par municipal bond – secondary market
3. Similar circumstance for a corporate discount Bond sold below par value
Permalink Submitted by Alan - IRA critic on Sat, 2023-03-04 15:48
This rule does not apply in any type of IRA account. There are no cap gains in an IRA and for a Roth IRA the only taxes are calculated using the Roth IRA ordering rules, where any taxable gain in a NQ distribution is taxable at ordinary income rates.