The Motley Fool Discussion Boards

Previous Page

Financial Planning / Tax Strategies

URL:  http://boards.fool.com/tmf-taxes-gtgt-so-im-still-not-clear-how-you-10470366.aspx

Subject:  Re: A Question on Roth IRA Redux - Part III Date:  12/17/1998  9:49 PM
Author:  nelsonpc Number:  7337 of 127540
TMF Taxes,

>> So I'm still not clear how you can make a $2k contribution, and now the FMV of the Roth IRA is $2k, but you say that it contains $500 of earnings. It would seem to me that the Roth IRA would contain your original $2k contribution. Nothing more. Nothing less.

To clarify, I initially put $2000 in a Roth IRA mutual fund. Due to the increase in the mutual fund price, it is now worth $2500. I reasoned that I am able to sell just enough shares of the fund to cover the $2000 withdrawal, but leave the remaining $500 so that I'm not penalized. Is it true that "earnings" include dividends AND capital gains?

Thanks,

nelsonpc
Copyright 1996-2018 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us