Would you guys know if adding funds (first) to IRA then removing the same amount in 5 days from same IRA would trigger any tax penalty? I am trying to avoid 90 free ride.

[SweetieJean]

You want to contribute to an IRA to get the tax deduction, and then take it out again right away?
It is too late now to make a 2018 contribution, if that's your plan.

[SweetieJean]

What 90 day free ride do you mean?

[trushar-mistry]

Relates to stocks buy/sell: <a rel="nofollow" target="_blank" href="https://www.fidelity.com/learning-center/trading-investing/trading/avoiding-cash-trading-violations"...>

[trushar-mistry]

Not trying to make 2018 contribution.

[SweetieJean]

There is no tax penalty unless you are under age 59.5.

However, the plan administrator might charge you a fee of some type.

[trushar-mistry]

Are you talking about IRA plan administrator?

[SweetieJean]

Yes, the IRA plan administrator.   And, depending upon how what purchase for the IRA, there may also be a contract penalty, such as for early withdrawal of a CD or annuity.

But why go this route at all? Just park the funds in a regular bank account or money market fund.

[macuser_22]

Ask the plan administrator.  One thing that you cannot do in a IRA is buy on margin.

[SweetieJean]

Good reminder.

[macuser_22]

OP said that there was no contribution.

The sounds like the OP made a security purchase in a IRA that did not have enough cash to cover the purchase.

[fanfare]

you would have two days to make the contribution. Stocks settle in two days.
But I suspect the free ride rules probably cannot be avoided after the fact.

[trushar-mistry]

This is correct. I purchased stocks then sold then purchase again and sold on one day using full value of my account. Hence the funds from the first round trip were not settled. Therefore creating a “free ride”. The amount I owe is very small $3000. I doubt I make any interest on it that is significant.

[trushar-mistry]

My question was can I pull out the money in 5 days so that I don’t invite penalties from IrS as early withdrawal sinc this is an IRA account?

[fanfare]

You can withdraw the contribution by the due date of your tax return without tax or penalty,