The Motley Fool Discussion Boards
Financial Planning / Tax Strategies
|Subject: Re: Take Cap Gain for IRA Tax Deduction?||Date: 12/22/1998 6:36 PM|
|Author: TMFTaxes||Number: 7490 of 122638|
[[ 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.
Want to learn more about taxes and investing? Then we have a deal for you!! The Motley Fool Investment Tax Guide is now available through Fool Mart. Be the first one on your block to own this masterpiece. There is still time available to do that tax planning (and tax saving) before the end of the year. So just click on this link (http://www.foolmart.com/market/product.asp?pfid=MF+013+I) to read more about this amazing collection of tax information. (Apologies for the shameless plug…but it is a pretty good book…if I do say so myself). In addition, if you would like to visit the Taxes FAQ (Frequently Asked Questions) area, click on http://www.fool.com/school/taxes/taxes.htm and you'll be right at the home page. Pay special attention to the "archives" section. Check it out. Finally, if you need to get to the IRS web site, click on http://www.irs.ustreas.gov to go directly there.
|Copyright 1996-2015 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us|