Dividends

From: "Peter & Karen Diamond" <diamond@vsi.net>
Subject: Dividends
Date: Sun, 29 Nov 1998 11:24:19 -0500

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Hello everyone,
I own some Bell Atlantic stock.  I like the stock and would be happy to keep
it.  The problem is that the stock pays a nice dividend and through dividend
reinvestments, I now own enough that the dividends are becoming a tax
problem.
As far as I can tell, there are only two options to avoid the taxes on the
dividends;

1.  Sell it.
2.  Sell $2000 of it every year and repurchase it into my Roth IRA.

I'm not inclined to sell, without a better investment in mind.  I'm also not
thrilled with option #2, since it would take quite a few years to complete
the repurchase.  There is also the capital gains issue.

Does anyone know of any other options?  Does the IRA purchase make sense
after paying the capital gains taxes?  I have held it long enough to pay the
20% CG rate.  The stock dividend is about 3%.  My basis is about 50% of the
current value.  I am in the 28% bracket for the dividends.
Thanks.

Peter Diamond


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