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Subject:  IRA capital gains convert to ordinary income!!! Date:  4/12/1998  12:51 PM
Author:  Pooksterish Number:  2753 of 78166

In my research to decide if I should go Roth or not, and convert or not, I uncovered a tid bit I didn't realize. I had already decided to go Roth when I found this out and now I'm more convinced.

In a regular IRA you are converting capital gains (which are taxed at a lower rate) into ordinary income (taxed at a higher rate). When you withdraw from the IRA, the income is taxed as ordinary income even if it comes from capital gains! What a rip off! I guess it's the damn governments way of taking back some of the benefits of IRA's. Maybe they did it because they knew most people wouldn't realize this dirty little secret!

So for those who don't qualify for a Roth or for another reason are better off not in a Roth, they would actually have to figure out if they are better off in a taxable in