Interactive Brokers IRA?

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1

I attempted to open an IRA with Interactive Brokers (IB) using an In-Service distribution from my company 401k. I also have a Revocable Living Trust, so it would have been a trust account.

After speaking with a rep, they indicate that it’s a service that they can’t offer (being a discount broker). I would end up with a 1099 at the end of the year (thus being taxable, it seems), instead of an IRA type of form being sent to the IRS (a 54xx form?).

Does anyone have any experience in this arena? With IB IRAs in particular?

Thanks… Bob

2

Yes, I had a Roth account with IB, but it was opened under unusual circumstances. I had two accounts at Options First (a Scottrade broker). They ceased trading operations and migrated their accounts to IB. I ended up with two accounts at IB. A revocable trust and a Roth.

If they were able to open these two accounts for me, it seems likely that they can open similar accounts for you. But there seems to be some confusion, either on behalf of the IB rep or yourself. The Roth is not a trust account. They are two separate accounts, a taxable trust account (yes, you get a 1099, just as you would if it were a standard account rather than a trust), and a tax deferred IRA.

If I were you I’d call again and talk to someone else, or look for a different broker. I did not like IB, but that’s just my opinion. I closed both accounts and moved everything to Fidelity. $8 commission, but I don’t trade enough for the commission to be a major consideration.

3

Yes, by their nature, tax deferred retirement accounts are not part of a living trust. They pass separately and should be handled separately.

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4

Bob, I’m not quite sure what you’re asking. Our family has multiple IRAs with IB and we haven’t had any issues, but we don’t have trusts. I’ve been using IB for a few years now, and I’ve been very happy with them.

Neil

5

Thanks. I got some bad direction from IB customer service and they had me open a Trust account instead of a rollover IRA account. Wasted my time.

I’m happy enough with them on the taxable account I currently have at IB, but I called Fidelity and they steered me straight right away on the rollover. So I’ll roll over part of my 401k to Fidelity so I can self direct in an IRA.

-Bob