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[[ I recently started buying stocks--unfortunately this resulted in no funds going to
my IRA. I am considering transferring money from mutual fund accounts in order
to make the full tax-deductible contribution. My fund has already paid out its
distribution for the current tax year. In view of the fact that I will generate a cap.
gain on the mutual fund shares sold--is this a good idea?]]

Sorry, but it's impossible for me to help you determine that answer since I don't know all that there is to know about your personal tax situation. But my guess is that your IRA deduction (assuming that you are able to deduct your IRA contribution...rememter that there ARE AGI limitation rules) will outweigh the gains that you'll realize from the distributions from your mutual fund.

[[ How can I determine
the effect on my tax return?]]

Not trying to be coy, but you'll have to prepare a "dummy" return using both alternatives, then compare the results. The only way that you can really find out the impact is to run the numbers and compare 'em.

TurboTax has a 1998 tax planning module in their program, if you don't want to try and do this by hand. That might help you out.

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