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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75339  
Subject: Re: May Stocks Be Contributed Directly Into an I Date: 8/31/1999 3:28 PM
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Cicero007a writes:

<<You are the second person to state the answer "NO" to this type of question without quoting your source. As a retired Research Scientist, I used to make my living by questioning all opinions unsupported by data -- so -- what is the IRS publication that forbids this ? >>

I didn't answer the original query, but I can tell you that Section 408(a)(1) of the Infernal (sic) Revenue Code specifically states "Except in the case of a rollover contribution ..., no contribution will be accepted unless it is in cash..." (emphasis added) A rollover contribution of stock may be made from an employer's qualified retirrement plan or another IRA only.

<<The question is can $2000 worth of appreciated securities be contributed instead. If this is permissable, one would never have to pay the capitol gains on the appreciation. It is similiar to contributing appreciated stock to a charity and taking a deduction for the total value.>>

Sorry, but I don't follow your logic here. You might not pay tax during your lifetime, but your heirs or your estate certainly will, and all gain will be taxed at ordinary income rates. Why would you wish to have them pay that instead of nothing (they inherit stocks in a taxable account at market value on your demise)? If you do pay tax in your lifetime, then it, too, would be at ordinary rates instead of the favorable capital gains rate you could have enjoyed. Therefore, your statement makes little sense to me.

Regards..Pixy
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