Re: Roth IRA Question

From: Rich Carreiro <rlcarr@animato.pn.com>
Subject: Re: Roth IRA Question
Date: Wed, 3 Feb 1999 16:02:28 -0500

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>I've never paid very much attention to the posts about Roth IRAs because I
>didn't think I would ever want to do an IRA.  Therefore, could someone direct
>me to a web site that gives a good overview of the Roth IRA and how it can be
>set up.

http://www.fairmark.com
http://www.rothira.com

>What I would like to do (and probably someone here could tell me if it is
>possible to do this or a variation of it) is dabble in some individual stocks

Yes, you can do that.

>and I was wondering if I could open an IRA and either put in some existing
>stocks I own

No, you can't do that.

>(or start the IRA with cash and buy stocks within the IRA) and buy

Yes, you can do that.

>and (hopefully) any profits in the IRA until I retired.  If I did well my
>understanding is that it would save all those capital gains I would otherwise
>have to pay upon the sale of the stocks if they weren't in a Roth IRA.

Yes, it would.  On the other side of the coin, you don't get to deduct your
losses.

Remember that since the contribution is limited to at most $2000 per year,
trading stocks with that little money will mean you'll be eaten alive by
commissions.

>start a Roth IRA like this?

Your favorite broker/bank/fund company.

> Do brokerage firms that sell stocks do Roth IRAs? 

Yes.

>Also, do I have until April 15, 1999 to put in $4,000 (married) for 1998 and

The limit is $2,000 for each spouse, not $4,000.  You have until April
15, 1999 to make a contribution for Tax Year 1998.  You have until
April 15, 2000 to make a contribution for Tax Year 2000.  If your
combined adjusted gross income is over $150,000, the maximum $2,000
contribution gets phased out until it hits zero at AGI of $160,000.

Rich Carreiro
rlcarr@animato.pn.com
P5-100/RedHat Linux 4.2

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