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Author: SirTas Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121258  
Subject: Re: Capital Gains Distributions Date: 12/19/2008 10:28 AM
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I have just received capital gains distributions from some mutual fund investments that are held in my traditional IRA. If those CG distributions are reinvested into the traditional IRA mutual fund am I allowed to claim the reinvested CG's as a normal IRA contribution when filing my taxes?

I think I know what you mean by "I have just received ..." but I'm not quite sure.

Do you mean that you personally really did receive these CG distribution -- so that they were withdrawals from the IRA? Then, you turned around and reinvested them in the IRA? If so -- which is not what I think you mean -- not only are you allowed to claim them as part of your contribution to the IRA, they must be counted as part of your contribution.

OTOH, if you just mean that the funds in the IRA directly gained these distributions, you never received the funds, they are not part of your income, and you cannot count them as part of your contribution. Contributions basically come from you. Distributions from mutual funds in the IRA, dividends from stock in the IRA, etc. don't come from you.

--SirTas
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