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Hello everyone!

My name is Hajile and I am confused new Fool. I've actually been "lurking" around The Fool for quite some time, reading and learning, but this is only my second post...and now it's time to get down to business!

I've been trying to understand how the average Fool goes about setting up an IRA, but I get flummoxed when I come to the Roth/non-Roth part and all the details relating to rollover, etc... Maybe someone out there can help me, in simple terms. (Note to frustrated readers: I have been scanning through the past messages, reading the Tax Q&A on the website and reading books, etc...but sometimes, there's too much information! (Have you tried typing "IRA" into the Fool search engine?) I want to get it all just right, call me silly!

Here's what I think I understand so far:

1) I can open a traditional (non-Roth) IRA before April 15, with a contribution up to $2K (for 1997). I can make this a non-deductable contribution if I don't want to pay tax on the rollover (scheduled for 1998, see #2 below)
2) I can add up to $2K after April 15 which would count as my 1998 contribution. I also think I can make this a non-deductable contribution and then rollover the whole enchilada into a Roth, which would mean I am done for that year ('98): I've made my $2K contribution, rolled into into a Roth IRA and I'm done. (I guess I would also have to pay taxes on the increase of the value of the IRA, but not the contributions, as long as they were non-deductable.)

Now, questions abound... can I make a contribution into that same Roth IRA after April 15, 1999? Do I have to open another IRA in order to make contributions for the next 5 years? I read about a "Five-Tax Year Rule" and a "Rollover Trap" on the Tax Q&A section of the Fool's School...anyone??? Waterhouse, (and all others I've called), is telling me I have to open two accounts, one for the Roth rollover and one for contributions.

Ok, after seeing the length of this post so far, I will try it from another angle in the intrest of brevity:

Is there any way I can contribute $2K for 1997 and then $2K for 1998, roll it into a Roth and then make contributions yearly, as opposed to having 2 accounts and then rolling over each contribution? Maybe you can see that my goal is to be both invested as fully as possible and also not to have multiple commissions (multiple accounts). I'm sorry if I've bored anyone, but I'm excited about posting!! Keep up the great work! I love reading your Foolishness!

To Freedom!


p.s. - I'm also aware that I may be totally wrong about what I think I know, so don't worry about hurting my feelings...
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