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I have some mutual funds that I have owned for several years. I would like to put them into an IRA. Will I be taxed on the capital gains if I put them into an IRA?
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harrytuttle writes:

I have some mutual funds that I have owned for several years. I would like to put them into an IRA. Will I be taxed on the capital gains if I put them into an IRA?

I reply:

I'm afraid that you simply can't do it. Contributions to an IRA can only be made in cash. If you wish, you may sell the mutual funds (up to your annual $2000 contribution limit), thereby triggering capital gains taxes, and then repurchase the funds within the IRA after making your contribution, but that's as close as you can come. If your funds have lost money (unlikely since you've owned them for years), be certain to avoid any risk of tripping over the wash sale rule. --Bob
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Thanks for the excellent advice Bob. It was just a thought. Guess I'll just hold on to them and avoid the capital gains tax.
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