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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 78705  
Subject: Re: Contributing existing stocks to my IRA? Date: 7/20/2000 12:30 PM
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Greetings, Pete, and welcome. You asked:

<<I have was given some stocks as a gift that have a very low cost and I will have to pay plenty of capital gains when I sell them. Can I move the stock into my IRA instead of cash and then sell them within my IRA to avoid the capital gains tax?>>

Well, you get high marks for thinking ahead, but unfortunately your leaders in Congress were there ahead of you. The tax code specifically precludes that option by saying an annual contribution may be made in cash only. The only time stocks may be moved to an IRA is when they are already part of another IRA or part of a qualified retirement plan of an employer and the transfer is part of a qualified rollover or direct transfer to that IRA. An annual contribution does not meet that criterion.

Nice try, but no banana this time.

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