IRA: Retirement Account Resource Center

IMPORTANT NOTE: This article has been customized for use by self-directed Individual Retirement Account (IRA) owners for information purposes only.  Persons are encouraged to consult a qualified tax professional with the investments and elections within the IRA.   IB does not provide tax advice.  For detailed information regarding IRAs, you may consult the IRS Publication 590-A about IRA contributions and the IRS Publication 590-B about IRA distributions.

This resource center provides a central reference point for information concerning the various IRA account types offered by IB. 

Important Notice - Select IRA Tax Reporting for key information with transaction and tax reporting in your IRA.

 

Account Management IRA Reference

Account Management IRA Tab

Beneficiary Options

Charitable Distributions

Conversions to a Roth IRA

Direct Rollovers - How & When

Frequently Asked Questions

Recharacterizations from a Roth IRA

Required Minimum Distributions

Rollover Rules & Conditions

Understanding Tax Forms

 

 

 IRS Circular 230 Notice: These statements are provided for information purposes only, are not intended to constitute tax advice which may be relied upon to avoid penalties under any federal, state, local or other tax statutes or regulations, and do not resolve any tax issues in your favor.

Wie kann ich das IB Sicherheitsgerät an Interactive Brokers LLC zurückschicken?

Background: 

Falls Sie Ihr Sicherheitsgerät an IB zurückschicken müssen (durch Beschädigung, Kontokonsolidierung oder Kontoschliessung), folgen Sie bitte den unten aufgelisteten Instruktionen:

 

Falls Sie Ihr Sicherheitsgerät an IB zurückschicken müssen (durch Beschädigung, Kontokonsolidierung oder Kontoschliessung), folgen Sie bitte den unten aufgelisteten Instruktionen:

  1. Laden und drucken Sie das Sicherheitslogingerät Rücksendeformular.
  2. Füllen Sie das Formular aus und packen Sie es zusammen mit dem Sicherheitsgerät ein.
  3. Schicken Sie das Paket an eine der unten aufgeführten Adressen.

Zu Ihrem Schutz empfehlen wir Ihnen einen gepolsterten Umschlag und einen Kurierservice mit Verfolgungsnummer (z.B. UPS, FedEx, DHL oder Deutsche Post Express Post) zu benutzen, da Sie für die Rücksendung verantwortlich sind im Falle eines Verlusts auf dem Weg zu unseren Büros. Bitte erlauben Sie die Dauer von 3 Tagen für den Erhalt und die Entfernung des Sicherheitsgeräts von Ihrem Konto. Bitte beachten Sie, dass die Lieferungszeit je nach Kurier Verspätung haben kann.

Zusätzliche Aktionen für Ersatzgeräte
Falls dies eine Ersatzgeräterücksendung und keine Kontoschliessungsrücksendung ist, rufen Sie bitte unsere technische Hilfsdienstabteilung unter 00800-42-276537 Option 2, 3 und die 2 an, um uns über Ihr defektes Gerät zu informieren und, damit wir Ihnen einen temporären Token zum weiteren Einloggen in die Kontoverwaltung und Trader Workstation aktivieren und zur Verfügung stellen können, bis das neue Ersatzgerät bei Ihnen eingetroffen ist. IB stellt mehrere verschiedene Gerätetypen zur Verfügung und die Ersatzprozederen dafür sind unten aufgeführt:
 

Für Platinum User:
Falls Sie Ihr Platinum Sicherheitslogingerät zurückschicken (Bild 1) und ein Ersatzgerät benötigen, müssen Sie in der Kontoverwaltung ein neues Gerät beantragen. Dies ist nötig wegen der erhöhten Sicherheitsfunktionen dieses Geräts. Sie können nur ein neues Gerät beantragen sobald IB den Erhalt des zurückgesendeten Geräts bestätigt hat, weil nur ein Sicherheitsgerät an einen User des Kontos gelinked werden kann. Nach der Anfrage stellen Sie bitte sicher, dass Sie die Bestätigungsseite der Anfrage, welche Ihre zur Aktivierung benötigten PIN Nummer und Ihren einzigartigen Passsatz enthält, ausdrucken.

Exhibit 1

 

Für Alpine User:
Falls Sie ein Alpine Sicherheitslogingerät zurückschicken (Bild 2), wird IB ein Ersatzgerät basierend auf der positiven Eingabe 'Ja' auf die Frage 'Benötigen Sie ein Ersatzgerät?' des SLS Rücksendefomulars reagieren. Es benötigt keine weiteren Aktionen auf unserer Webseite.

Exhibit 2

 

Für Digitale Sicherheitskarten (DSC) User:
Falls Sie eine Digitale Sicherheitskarte zurückschicken und ein Ersatzgerät benötigen, loggen Sie sich in die Kontoverwaltung ein und bestellen eine neue Karte. Dies ist nötig wegen der PIN Funktion dieser Karte. Bitte merken Sie sich Ihren PIN für den Aktivierunsprozess der Karte.

 

Für Sichereitsloginkarten User:
Dieser Kartentyp muss nicht zurückgeschickt werden und kann zerstört werden.

Postadresse für US & Kanadische Kunden: Postadresse für EU & Asiatische Kunden: Postadresse für  Australische Kunden:
Interactive Brokers, LLC.
Attn: Token Return Department
2 Pickwick Plaza
Greenwich, CT 06830
(203) 618-4006

Interactive Brokers (U.K.) LTD.
Attn: Token Return Department
Gotthardstrasse 3
CH-6301 Zug
Switzerland
+41-41-726-9500

Interactive Brokers, LLC.
Attn: Token Return Department
Grosvenor Place, Level 42
225 George Street
Sydney, 2000
+61 (2) 8093-7300

Kontoschliessung
Nach Schliessung des Kontos und Rücksendung des Sicherheitsgeräts können Sie sich weiterhin in die Kontoverwaltung einloggen um Kontoauszüge oder Steuerformulare anzuschauen und/oder zu drucken. Nach der Schliessung können Sie sich ohne das Sicherheitsgerät mithilfe von Usernamen und Passwort in die Kontoverwaltung einloggen.

 
Für weitere Fragen oder Unklarheiten wenden Sie sich bitte an unsere erfahrenen Sicherheitsspezialisten unter 00800-42-276537 Option 2, 3 und die 2, oder schicken Sie eine Email an tac@interactivebrokers.com
 
Für Informationen zur Ersatzgerätegebühr für verlorene, gestohlene, zerstörte oder nicht zurückgeschickte Sicherheitsgeräte schauen Sie sich KB1861 an.

 

Aktivierung einer Online Sicherheitscodekarte

Übersicht: 

Die Online Sicherheitscodekarte dient als temporäre Lösung für Kunden, die keinen Zugriff auf Ihr permanentes Sicherheitsgerät besitzen und einen temporären Token zum Einloggen beantragt haben.

Hintergrund:

Die Online Sicherheitscodekarte dient als temporäre Lösung für Kunden, die keinen Zugriff auf Ihr permanentes Sicherheitsgerät besitzen und einen temporären Token zum Einloggen beantragt haben. Nach Aktivierung des temporären Tokens empfiehlt IB den Kunden sich in die Kontoverwaltung einzuloggen und die Online Sicherheitscodekarte zu aktivieren, die folgende Vorteile mitbringt:

- Erhöhte Sicherheit vor Internethackern durch die Abfrage zufälliger Codes beim Login;

- Verlängert das Zeitfenster (21 Tage ggü. 2 für temporären Token) zum Erhalt und zur Reaktivierung des permanenten Sicherheitsgeräts, wodurch die Online Sicherheitscodekarte deaktiviert wird;

- Erlaubt Rücküberweisungen und Informationsänderungen ohne die Restriktionen, die durch die Aktivierung des temporären Tokens entstehen;

- Kann direkt in der Kontoverwaltung erstellt und aktiviert werden und erlaubt die Reaktivierung des permanenten Sicherheitsgeräts ohne Kontakt zum Kundendienst.

 

Die Schritte zur Aktivierung der Online Sicherheitscodekarte lauten wie folgt:

(Falls die Menüs der Kontoverwaltung oben angezeigt werden):

1. Wählen Sie Konto verwalten, Sicherheit und Sicherheitsloginsystem;

 

2. Wählen Sie 'Ja, ich möchte am Sicherheitsloginsystem teilnehmen' und auf 'Fortfahren'

 

3. Nun wird Ihnen ein Bild der Online Sicherheitscodekarte angezeigt. Bitte drücken Sie auf die 'Drucken' Option, die sich oberhalb der angezeigten Karte befindet (oder machen Sie einen Rechtsklick mit der Maus auf die Karte um dieses Bild auf Ihrem Desktop zu speichern).

 

4. Drücken Sie auf die 'Bestätigen' Option um die Kartenaktivierung zu initialisieren. Zwei Kartenindexwerte erscheinen auf dem Bildschirm.

 

5. Geben Sie den drei-stelligen alphanummerischen Code der Karte, die zur ersten Indexnummer auf der Karte angezeigt wird, in das 'Kartenwerte' Feld ein und wiederholen Sie diesen Vorgang mit der zweiten Indexnummer ohne ein Leerzeichen zwischen den Codes einzugeben.

 

6 Drücken Sie auf 'Übermitteln'

 

7. Nach Aktivierung der Karte wird Ihnen das Ablaufdatum zusammen mit Optionen für weiterführende Aufgaben angezeigt.

 

Schauen Sie KB1042 für Videoinstruktionen zum Login mit der Sicherheitscodekarte.

Schauen Sie KB1942 für Instruktionen zur Reaktivierung des permanenten Sicherheitslogingeräts

Schauen Sie KB1943 für Instruktionen zur Beantragung eines Ersatzsicherheitsgeräts

 

(Falls die Menüs der Kontoverwaltung links angezeigt werden)

1. Wählen Sie User Management und Secure Login System;

2. Wählen Sie 'Yes, I want to participate in the Secure Login System'

3. Nun wird Ihnen ein Bild der Online Sicherheitscodekarte angezeigt. Bitte drücken Sie auf die 'Print' Option, die sich rechts oberhalb der angezeigten Karte befindet (oder machen Sie einen Rechtsklick mit der Maus auf die Karte um dieses Bild auf Ihrem Desktop zu speichern).

4. Drücken Sie auf die 'Confirm' Option um die Kartenaktivierung zu initialisieren. Zwei Kartenindexwerte erscheinen auf dem Bildschirm.

5. Geben Sie den drei-stelligen alphanummerischen Code der Karte, die zur ersten Indexnummer auf der Karte angezeigt wird, in das 'Card values' Feld ein und wiederholen Sie diesen Vorgang mit der zweiten Indexnummer ohne ein Leerzeichen zwischen den Codes einzugeben.

6. Drücken Sir auf 'Submit'

7. Nach Aktivierung der Karte wird Ihnen das Ablaufdatum zusammen mit Optionen für weiterführende Aufgaben angezeigt.

How to send documents to IB using your smartphone

Übersicht: 

Interactive Brokers allows you to send us a copy of a document even if you do not currently have access to a scanner. You can take a picture of the requested document with your smartphone.

Below you will find the instructions on how to take a picture and send it to IB per email with the fllowing smartphone operating systems:

iOS (iPhone)

Android (i.e. Samsung Galaxy, HTC One X, Sony Xperia, Motorola Droid)

Windows Phone (i.e. Nokia Lumia, HTC Titan, Samsung Focus)

 If you already know how to do so, please consult the instructions about the information you will need to send us aside from the document picture. Click HERE - Where to send the email to and what to include in the subject.

iOS
1. Press the power button to turn your iPhone screen on. Tap, hold and slide upwards the
Camera icon on the bottom right of your screen then drag it upwards to access the Camera.

slide up from the lock screen to take a picture

- If you do not have the Camera icon, you may access the Camera app from the home screen
of your iPhone.
2. Place your iPhone above the document and take the desired portion or page of the document
and tap on the Camera button (designated with 1 on the below illustration - Fig. 3) to take a
photo. Then you need to access the picture - tap the image in the lower left-hand corner (number 2 in the
illustration)

Tap here to take a picture

3. Exit to the home screen by pressing the round Home button on the face of the iPhone.
4. Open the Photos app
5. Next, tap the album ‘Camera Roll’. Make sure that the picture is clear and the document
is well legible, if it isn’t, please repeat the previous two steps.
6. Touch once the picture to make the menus appear and tap the share icon
designated with 1 in the illustration below.

Share button iOS

5. Select the first option - Email Photo. Please consult the following instructions for the next step - what address you should send the picture to and what else to include aside from the document, HERE.
Note: to send emails your phone has to be configured for that. Please contact your email
provider if you are not familiar with this procedure.


Android
1. Open your applications list and start the camera app. Depending on your phone model, make or setup it might be called differently.
2. Place your phone over the document and take the desired portion or page of the document and
tap the icon for the camera. (The generic button will look like the one shown below.)

Tap to take a picture
3. Press the Home key to go back to the idle screen. Go back to the apps list and start the Gallery
application. On some phones it may be called Pictures or Photos.
4. Open the album called Camera or All pictures. The last image in either of those should be the
document you just took a picture of. Tap the screen once to bring up the buttons and tap the share
icon, which generically should look as shown below.

Share on Android
5. In the sharing menu that will be displayed now tap on Email. Please consult the following instructions for the next step - what address you should send the picture to and what else to include aside from the document, HERE.
Note: to send emails your phone has to be configured for that. Please contact your email
provider if you are not familiar with this procedure.

Send per email

 

Windows Phone
1. Press the camera button in the Desktop menu of Windows phone. (If you do
not see the camera in the desktop menu, please scroll to the right and choose
camera in the listed applications)
2. Take a picture by pressing the trigger button on the side of the phone.
3. Open the picture by scrolling to the left and press the ‘...’ menu item
at the bottom task bar to see the available options.
4. Please choose send and the configured Email account you would like to use.
5. In the upcoming email, please add the destination email address, the
subject and the text you would like to send and press the ‘Send email’ button in
the bottom menu. Please consult the following instructions for the next step - what address you should send the picture to and what else to include aside from the document, HERE.
Note: to send emails your phone has to be configured for that. Please contact your email
provider if you are not familiar with this procedure.


WHERE TO SEND THE EMAIL AND WHAT TO INCLUDE IN THE SUBJECT
The email has to be created observing the below instructions:
1. In the ‘To:’ field type...
a. newaccounts@interactivebrokers.com if your you are a resident of a non-European country
b. newaccounts.uk@interactivebrokers.co.uk if you are a European resident
2. The subject field must contain all of the below:
a. Your account number (it usually has the format Uxxxxxxx, where x are numbers) or your
username
b. The purpose of sending the document. Please use the below convention:
i. PoRes for a proof of residential address
ii. PID for a proof of identity

Comparison of U.S. Segregation Models

INTRODUCTION
The regulation of securities and commodities products and brokers1 in the U.S. is administered by two distinct federal agencies, the Securities and Exchange Commission (SEC) for securities including stocks, ETFs, bonds, options and mutual funds and the Commodities Futures Trading Commission (CFTC) for commodities including futures and options on futures.2 While both agencies seek to safeguard customer assets by restricting their use and “segregating” them from assets of the broker, the regulations and manner in which they accomplish this differs. The following article provides a basic overview of two segregation models and additional considerations relating to IB accounts.


OVERVIEW
Differences between the CFTC and SEC segregation models originate largely from the products themselves, whose characteristics are fundamentally unique. Commodity products, by nature, do not involve an extension of credit by the broker to the customer as a futures contract is not an asset but rather a contingent liability which is marked-to-market and a long futures option, while an asset, must be paid for in-full. Consequently, non-option assets in a commodities account are generally comprised of funds deposited as margin to secure performance on the contracts therein. Since the broker may not use the funds of one customer to margin or guarantee the transactions of another, the commodities segregation requirement (CFTC Rules 1.20 – 1.30) is equal to the gross assets of all customers and the broker needs to add its own funds to segregation to cover customers whose net equity is in deficit.

A securities margin account, in contrast, can facilitate the extension of credit for the purpose of long securities (e.g., stocks, bonds) purchases or short securities sales on a secured basis. The segregation or reserve requirement rules recognize this through special provisions for the protection of each of the cash and securities components, further distinguishing fully-paid securities from those whose purchase the broker has financed and maintains a lien upon. Here, the broker must deposit into a separate bank account the net amount of customer cash balances3, in accordance with a formula set forth in SEC Rule 15c3-3. In addition, the broker must identify and segregate in a good control location (e.g., depository, bank) customer securities which meet the definition of “fully paid” or “excess margin”.

The table below provides a comparison of the main principals of each model.

COMPARISON OF CFTC & SEC SEGREGATION MODELS
PRINCIPAL CFTC SEC

Separation of Customer Balances

 

 

 

 

 

 

 

Commodity customer balances must be maintained separate from firm assets and cannot be used to finance proprietary business activities or to satisfy firm debts.

Funds used for trading on non-US commodity exchanges must be kept separate from those used for trading on U.S. exchanges (even for the same customer).

Commodity customer balances must also be maintained separate from securities customer balances (even for the same customer).

Securities customer balances must be maintained separate from firm assets and cannot be used to finance proprietary business activities or to satisfy firm debts.

Securities customer balances must also be maintained separate from commodity customer balances (even for the same customer).

 

 

Priority in the Event of Broker Default

 

 

 

 

 

 

Commodity customers maintain priority and equal claim over assets in each of their respective U.S. segregated and non-U.S. secured pools.

No claim on assets in a commodity pool in which one is not a participant and no claim on securities customer assets.

If commodity segregated assets are insufficient to meet claims and broker is insolvent, customers share equally in shortfall and become general creditors for residual claims.

Securities customers maintain priority and equal claim over assets.4

No claim on commodity segregated assets.

If securities segregated assets are insufficient to meet claims, broker is insolvent and claims exceed SPIC coverage, customers share equally in shortfall and become general creditors for residual claims.

 

Segregation Style

Gross – the broker may not use the funds of one customer to margin or guarantee the transactions of another and must segregate assets in an amount at least equal to the sum of all customer credit balances.

Net – broker may use customer cash credit balances to finance, on a secured basis, margin loans to other customers and may lend or pledge a portion of customer securities purchased on margin to other customers selling short.

 

Investment of Cash Balances  

Broker is allowed to reinvest commodity customer’s cash balances and retain an interest in the income generated.

Permissible investments include: U.S. government securities, municipal securities, government sponsored enterprise securities, bank CDs, corporate obligations (commercial paper, notes and bonds) fully guaranteed as to principal and interest by the U.S. under the Temporary Liquidity Guarantee Program and money market mutual funds.

Securities which are the subject of reinvestment must be maintained in a segregated account.
 

Broker is allowed to reinvest securities customer’s cash balances and retain an interest in the income generated.

Permissible investments limited to “qualified securities” defined as securities which are guaranteed as to both interest and principal by the U.S. government.

Securities which are the subject of reinvestment must be held in Special Reserve Bank Account (i.e., segregated).
Computation Frequency Daily Weekly
Insurance None Securities Investor Protection Corporation (SIPC) provides insurance of up to USD 500,000 with a cash sublimit of USD 250,000.

 

ADDITIONAL CONSIDERATIONS
In addition to the safeguards afforded through segregation, IB employs a number of policies and practices which serve to enhance the safety and security of accounts beyond that outlined above. These include the following:

- IB computes its securities segregation or reserve requirement on a daily rather than weekly basis as allowed by regulation, thereby ensuring timely determination as to the amount required to be reserved and the deposit of funds necessary to satisfy the requirement.

- IB’s does not avail itself of the generally more permissive rules with respect to the investment of commodity customer cash balances. These balances are instead invested in a manner similar to that of securities cash balances (i.e., U.S. government securities) with the exception of an occasional investment in money market funds.

- All customer securities positions are held in the securities segment of the Universal Account as opposed to the commodities (commodities margin met with cash and/or futures options), thereby limiting their hypothecation to the more restrictive rules of the SEC.

- In addition to SIPC coverage, IB maintains an excess SIPC policy with Lloyd's of London which, in aggregate with SIPC, offers insurance totaling $30 million (with a cash sublimit of $900,000), subject to an aggregate firm limit of $150 million.

- IB offers account holders the ability to sweep cash balances in excess of that required for margin purposes in either the securities or commodities segment to the other segment. Details as to this feature may be found in KB1851.

- For additional information regarding IB strength and security, please review the following website page.

 

Other Relevant Knowledge Base Articles:

Cash Sweeps

Information Regarding SIPC Coverage

 

Footnotes:

1The term broker as used in this article is intended to refer to an organization registered with both the SEC as a Broker-Dealer and the CFTC as a Futures Commission Merchant for the purpose of conducting customer transactions

2Single stock futures are a hybrid product jointly regulated by the SEC and CFTC and allowed to be carried in either account type.

3Including cash obtained through the use of customer securities such bank pledges or stock loans less cash required to finance customer transactions (e.g., stock borrows, customer fails to deliver of securities, or margin deposited for short option positions with OCC).

4Assets, or customer property, which securities customers share in proportion to their net equity claim, include cash, margin securities and fully-paid securities held in “street name”. IB does not hold securities in the customer’s name which are not considered bulk customer property.

W8 Re-certification

If you are not a U.S. citizen or entity formed within the U.S. and have an account with Interactive Brokers, you are requested to declare your citizenship or country of formation with the US tax authority (IRS). This declaration can be done online by correctly filling out the W-8BEN form. Filling out this form is an easy process that only takes a few minutes. In the short movie below, we show you where to find the W-8BEN in your IB account management and how to fill it out.

If you fail to declare your foreign citizenship or country of formation, and IB does not have a valid W-8BEN form on file, you are presumed to be a US person/entity without a proper tax certification. As a US person/entity, you will be subject to backup withholding at a rate of 28% on interest, dividends, and substitute payments in lieu; as well as gross proceeds. 

Every 3 years the IRS requires a re-certification of the W-8BEN form. IB will ask the beneficial account owner to re-certify their foreign status by re-signing the W8-BEN in order to continue their status as a foreign person and claim the tax treaty benefits. If you experience any problems or have questions regarding the W-8BEN form or how IB handles Non-US persons and entities, select this Tax Information and Reporting link and choose the tab Non-US Persons and Entities or consult the following IRS information page for more details: www.irs.gov/instructions/iw8/ch02.html

How to obtain an Online Security Code Card

Übersicht: 

The Online Security Code Card provides you with a temporary access to your account and trading platform for a duration of 21 days. This is an ad-interim solution usually needed in those cases:

A. You are temporary away from your permanent security device and you are waiting to regain access to it.

B. You have lost your permanent security device and you want to either request a replacement or maintain access to your account while waiting for the delivery to happen.

Background: 

For the cases above mentioned, we assume you have already notified IB Client Services and obtained a Temporary Code, as explained in KB70. You can now extend the duration of your temporary access as follows

 

Activation procedure

1. Open your browser and go to the web page ibkr.com

2. Click on Login > Client Portal

3. Enter your credentials and click on Login. Enter the Temporary Code you received from IB Client Services to complete the authentication and click again on Login
 
4. From the left side menu, click on Settings > User Settings. Then, within the Security box, click on the whee(Configure) icon next to Secure Login System1
 
5. The system will list all the security devices currently active for your user. Below the list, click on the button Request Online (Temporary) Security Code Card

6. Your Online Security Card will be displayed. Click on Print2

7. Please make sure the card has been printed correctly in all its parts and it is clearly readable. Then click on Continue

8. Two index numbers will appear on the activation screen. Locate the first index number on your card and enter the correspondent three digits code into the Card Values field. Then repeat the same operation for the second index number, leaving no spaces between the codes. Then click on Continue

9. You will see a confirmation message stating the expiration date of the card. Click on OK to finalize the procedure

 

Notes

1. If you use the Classic Account Management, click on the top menu Manage Account > Security > Secure Login System > Security Device

2. Should you not have a printer connected to your device, you can right-click directly on the card image and save it as an image file. In this case, upon proceeding to the activation screen, you may receive a warning message.
Please make sure that the image file has been successfully stored on your device and that it is readable before you acknowledge the warning message by clicking on Continue

 

References
  • See KB1131 for an overview of the Secure Login System
  • See KB1943 for instructions on requesting a replacement Digital Security Card+
  • See KB2636 for information and procedures related to Security Devices
  • See KB2481 for instructions about sharing the Security Login Device between two or more users
  • See KB2545 for instructions on how to opt back in to the Secure Login System
  • See KB975 for instructions on how to return your security device to IB
  • See KB2260 for instructions on activating the IB Key authentication via IBKR Mobile
  • See KB2895 for information about Multiple Two-Factor Authentication System (M2FS)
  • See KB1861 for information about charges or expenses associated with the security devices
  • See KB69 for information about Temporary passcode validity

 

How to Request Trading Permissions for IB U.K. CFD's

How to request trading permissions for IB U.K. Contracts for Difference (CFD's)

 

Account Linkage FAQs

 

Q: Which accounts are eligible for linkage?

A: Eligible accounts include Independent individual and IRA accounts which have matching country and state of legal residence and account title.

 

Q: What are the benefits of linkage?

A: The principal benefits of linkage are ease of access and potential savings in market data subscription fees. Following linkage, all accounts will be accessed via a single User Name, password and SLS device. After login to the trading platform or Account Management you will be provided with a drop-down window for selecting the account you wish to trade or perform administrative tasks thereby eliminating the need to memorize multiple login information or maintain additional security devices. 

In addition, as market data subscriptions are billed at a session level (i.e., User Name) and only a single TWS session can be viewed for any one user at a given time, account holders previously maintaining duplicate market data subscriptions for multiple accounts have the opportunity to consolidate those following linkage.

 

Q: If I link two accounts enrolled in SLS, are there any restrictions with respect to the security device which will remain following linkage?

A: Yes. In the case of a linkage request where the two accounts are SLS enrolled but maintain different devices, IB requires that the account holder retain the device having the highest protection rating as noted at the time of your request.

 

Q: What do I do with security devices which no longer are operable following linkage?

A: In the case of Security Code Cards, you may discard of the device once the linkage has been processed. For all other devices, you will need to return the device to IB to ensure that your account is not assessed a lost device fee.  Click here for additional information regarding returning your device.

 

Q: Can I maintain multiple groups of linked accounts?

A: No. Once an account linkage has been requested and processed, all subsequent requests must be linked to that original grouping

 

Q: Can I unlink accounts which have already been linked?

A: No. Once a link has been established it is permanent and cannot be undone.

 

Q: Does linkage impact the calculation of Minimum Monthly Activity Fees?

A: Yes. IB will calculate the consolidated monthly commission generated across all linked accounts. If the consolidated commission exceeds the number of accounts multiplied by USD 10, the minimum activity fee will be waived. If the consolidated commissions are less than the required minimum, an activity fee is charged on an account-by-account basis.  Please review the website for information regarding Minimum Monthly Activity Fees.

 

Q: Why has the linkage request which I submitted not been processed?

A: Linkage requests are automatically processed as of the close of business on the day submitted when accounts are SLS enrolled and the individual information on record identical (e.g. mailing address, telephone numbers, email address, etc.). If any of these conditions are not met, the linkage request will not be processed until SLS enrollment is complete and/or Compliance review of the information changes and any supporting documentation necessary to evidence the change has been received.

 

Q: Once linked, from which account will market data subscription fees be deducted?

A: Account holders are allowed to designate a billing account from which all market data fees may be deducted.  We recommend that you select the account which generates the greatest level of commission activity if your subscription provides for fee waiver should your monthly commissions reach a minimum threshold (e.g., U.S. Securities & Commodities Market Data Bundle). IB will only look to the activity conducted in the billing account to determine waiver eligibility rather than aggregating the commission activity across all linked accounts.  In selecting the billing account, consideration should also be given to selecting an account having the greatest level of equity as well as cash.  This will minimize situations where the account has insufficient cash and the billing serves to increase the margin debit balance or where the account does not have margin permissions or maintains insufficient equity with loan value which, in both cases, will result in the liquidation of positions to cover the fees. IB will not act to automatically transfer cash across linked accounts to meet subscription obligations.

 

Q: If I link two accounts, will I have any restrictions on short sales?

A: Accounts owned by the same beneficial owner are considered in a consolidated manner when determining the ability to sell a stock short. If account A is long 100 shares and account B is short 100 shares, a new order to sell shares in either account A or account B will be considered a short sale, as overall the accounts hold a 0 position. The new sell order would be subject to any applicable locate requirements.

Cost Basis Reporting

 

1099 Reporting

Year End Reports

Account Transfers

 

1099 Reporting 

Statement and Year End Reporting for US persons and entities comprises the following:

1.  Cost Basis:  While the required reporting schedule was staggered, the primary cost basis that will be reported to the IRS includes equities bought and sold after December 31, 2010.  This includes the adjusted cost basis resulting from wash sales and corporate actions.

The future phase-in period for broker reporting includes the assets sold on or after the following dates:

--- Mutual Funds and  ETFS - 1/1/2012

--- Simple debt instruments (i.e. treasuries, fixed-rate bonds & municipal bonds) and options,  - 1/1/2014

--- Other debt instruments - 1/1/2016

2.  Tax Basis Method:  Brokers are required to use the method first in, first out (FIFO), unless given other instructions by an investor.  Changes to your tax basis method may be submitted through the Tax Optimizer.  The Tax Optimizer is launched from within Account Management and is available for stock, option, bond, warrant and single-stock future trades.  

IB offers multiple  tax basis methods, including three basic options:

●        First In, First Out (FIFO) - This is the default option.  FIFO assumes that the oldest security in inventory is matched to the most recently sold security.

●         Last In, First Out (LIFO) - LIFO assumes that the newest security acquired is sold first.

●         Specific Lot - Lets you see all of your tax lots and closing trades, then manually match lots to trades. Specific Lot is not available as the Account Default Match Method.

Tax Optimizer also lets you select the following additional derivatives of the specific identification method.

●        Highest Cost (HC), Maximize Long-Term Gain (MLTG), Maximize Long-Term Loss (MLTG), Maximize Short-Term Gain (MSTG), and Maximize Short-Term Loss(MSTL).


For complete instructions on using the Tax Optimizer and details on the lot-matching algorithms for each method, see the Tax Optimizer Users Guide.

Note:  Changing your tax basis is effective immediately.  The basis selected will be applied to all subsequent trades on the account statements and tax reports.  Updates will not affect previously closed trades nor the TWS profit and loss data displayed.


3.  Gain & Loss Categories:  An additional requirement to the cost basis reporting is the capital gain or loss category.  The gain or loss category of equities is determined by the length of time in which the security was held, known as the "holding period." 

●         Short-Term - Holding periods of one year or less are categorized as "short-term."

●         Long-Term  - Holding periods over one year are categorized as "long-term."

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Year End Reports

The following statements and reports display cost basis information that will be reported on Form 1099-B for eligible accounts.

  • Monthly Account Statements
  • Annual Account Statements 
  • Worksheet for Form 8949

For a complete review of the tax information and year end reporting available, click here.

Note:  Unlike the Account Statements, the Gain & Loss Worksheet for Form 8949 may consolidate sell trades.  The cost basis will be adjusted, as required for 1099-B reporting.

 

Asset Transfers

U.S. legislation from 2008 included new guidelines for tax reporting by U.S. financial institutions.  Effective January 2011, U.S.  Brokers are required to report cost basis on sold assets, whether or not a gain/loss is short-term (held one year or less) or long-term (held more than one year).   U.S. brokerage firms, Interactive Brokers LLC (IB) included, implemented changes to comply with the legislation.

For more information on cost basis with asset transfers, see Cost Basis & Asset Transfers.

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Disclaimer:  IB does not provide tax advice. These statements are provided for information purposes only, are not intended to constitute tax advice which may be relied upon to avoid penalties under any international, federal, state, local or other tax statutes or regulations, and do not resolve any tax issues in your favor. We recommend that you consult a qualified tax adviser or refer to the U.S. Internal Revenue Service.

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