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URL:  http://boards.fool.com/ira-mistake-10729484.aspx

Subject:  IRA mistake Date:  4/2/1999  3:21 PM
Author:  writeroads Number:  13504 of 121150

We opened an IRA (traditional) for my wife in August 1998 with a $2000 deposit, which we used to buy shares in The Gap. The $2000 has grown to about $3328.

In the course of working with our CPA to prepare our tax return, our CPA advised us that we cannot deduct the $2000 from our income because my wife is contributing to a pension plan at work. So we should have set up a Roth IRA back in August, because we don't get the advantage of a traditional IRA. (We didn't set up a Roth IRA in the first place because when we ran the numbers given my wife's age, etc. the traditional appeared better and we were not aware of the pension plan problem.)

WE called Ameritrade to see if we could convert to a Roth. Basically they said no. We'd have to sell the stock (I think that's what they said), withdraw the money, pay the penalty for withdrawing the money, and even pay the capital gains tax. If that is all true, we'll just leave it alone until my wife retires and start a Roth IRA in 1999.

Any thoughts?
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