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Author: jwaidelich Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76384  
Subject: Re: BASIC IRA QUESTION Date: 1/10/2000 1:59 PM
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My question is if you invest stocks how does the commission come into play. For instance if i buy stock XYZ with a $20 commission and then sell it the same year with another $20 commission does the $40 in commissions come out of the $2000 limit or how does this work????
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Good question. Unfortunately, the $40 comes out of your IRA, effectively reducing your maximum contribution to $1960. As far as I know, there is no way to get around this (such as paying the commission from another account, writing a separate check for the commission, etc.) It might depend on the company that you are working with, however.

Here are a few ideas:
1. Talk to your broker, and see if he/she has any ideas about how to avoid paying the fee out of your IRA.
2. If you plan on trading often in your IRA, choose a broker with low commissions.
3. If you get any bonuses from you broker in the form of commission-free or cheeper trades, save them to use with your IRA.

I'd love to hear anyone else's ideas on how to get around this pitfall.

- JW

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