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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 76244  
Subject: Re: Trading within an IRA Date: 12/21/1998 9:26 AM
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Greetings, Jerry, and welcome. You asked:

<<In the Motley Fool Investment Guide, the Gardners indicate that the Foolish 4, as a single investment method, is perfect for IRA's.

I am under the impression that a more agressive method that involves maybe even several trades a year is PERFEST for an IRA, because that capital gains are not taxed in an IRA. Am I wrong?>>


That all depends on what you think will happen to tax rates and whether you're using a traditional or a Roth IRA. In a taxable account, long term capital gains are taxed at a maximum rate of 20%. In a traditional IRA, they will be taxed at ordinary income tax rates in effect in the year of distribution. In a Roth IRA, they will not be taxed at all. Depending on the circumstances, I can make an argument that any one of three is better than the other two from an income tax perspective. You have to look at your own situation to see which type of account is better for you.

Regards….Pixy
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