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Financial Planning / Tax Strategies


Subject:  ESPP to IRA Date:  1/27/1999  3:10 PM
Author:  lonwolf Number:  9070 of 127753

I have been participating in my company's Employee Stock Purchase Plan for the last year. Foolishly, I have been using it as a forced savings plan. The stock has been doing well, and I would like to use it to open a Roth IRA for myself or my wife. (I don't qualify for a traditional because I also participate in a 401k.) Before I do this, I just have a couple of questions.

1. Can you open up an IRA with stock?

2. If you can, how to you calculate their value for the $2000/year/person limit?

3. Because the stock was bought through an ESPP, how do you take the special tax circumstances into account?

4. What happens if the stock exceeds $2000 before it is deposited into the Account. (It is very close to that right now.)

I don't want to sell the stock and put the proceeds in an IRA, because I would have to pay short term capital gains and income tax on the discount.

Thank you for your help in this matter. I read the Investment Tax guide and the FAQ, but I didn't find an answer.

Thank you,

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