IRA withdrawal

Question: If I borrowed amount $x from my IRA and invest it and make $x + 10% and return $x back into my IRA within the 60 day limit, what is the status and treatment of the 10% profit? Treated as ordinary income? Paul, Bethesda, MD.

Answer: Yes, short-term gains are taxed at your ordinary income tax rate. But for a whole host of reasons it’s a really bad idea to take money out of your IRA and try this strategy.