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URL:  http://boards.fool.com/ltlt-if-you-open-a-quotself-directed-12461919.aspx

Subject:  Re: IRAs What does my money get invested in??? Date:  4/25/2000  1:39 AM
Author:  TMFExRO Number:  21502 of 75888

<< If you open a "self-directed IRA" at a brokerage house, you may be able to buy and sell shares of stocks as well as buy and sell shares of mutual funds. "Self-directed IRAs" seem relatively rare but is an option if one wants to trade stocks within one's retirement portfolio.

In all cases, there is usually more paperwork involved and sometimes additional fees because of special reporting and custodial requirements to maintain favorable tax status of that accunt. >>

I'm going to quibble just a little with an otherwise excellent response.

Self-directed IRAs are far from rare. Any brokerage, discount or otherwise, will be happy to set one up for you for free, and annual maintenance fees are rare. There's really no need to pay them nowadays. The only special paperwork involved is the account application, and that's all boilerplate provided by the custodian.

The custodian's reporting is actually much easier than that involved in a taxable brokerage account, since dividends and sales (1099-DIV and 1099-B transactions) are not reported for activity within an IRA. The only reporting required of the IRA custodian is contributions and account balance.

TMF ExRO
Phil Marti
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