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Author: lovee Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76420  
Subject: Investing IRA funds in equity? Date: 3/23/2000 2:51 AM
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Hello, new to the game and i have a question..

I have been led to believe that a IRA can be invested in individual securities, and then can be managed by you personally like any stock portfolio.

I really can't understand how this would work...

An individual is allowed a 2000 dollar contribution yearly, so say I buy 2000 of anything, ORCL and designate the fund as an IRA. I can understand that leaving that be, or say buying 2000 more next year works, but how can you actively trade within an IRA?
Because, say in a year, my initial contribution is now worth 4000, but I want to add another stock, so I sell 3000 worth of ORCL and buy INTC, and then in addition I contribute my annual 2000. Doesn't that add up to a 5000 dollar contribution?
thanks for your time, and sorry if this is a silly question
lovee
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Author: TMFExRO Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 20416 of 76420
Subject: Re: Investing IRA funds in equity? Date: 3/23/2000 4:41 AM
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<< I have been led to believe that a IRA can be invested in individual securities, and then can be managed by you personally like any stock portfolio.

I really can't understand how this would work... >>

1. You establish an IRA with a broker as custodian.

2. You fund the IRA with contributions ($2,000 per year limit) and qualified rollovers/transfers.

3. You trade your heart out with funds/stocks INSIDE the IRA. As long as proceeds from transactions stay within the IRA, there's no current tax consequence.

TMF ExRO
Phil Marti

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Author: ez2bhard Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 20470 of 76420
Subject: Re: Investing IRA funds in equity? Date: 3/23/2000 9:13 PM
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lovee,

IRA's can get pretty confusing--in my simpleminded way of looking at things, I think of an IRA as a jar--you put up to $2k each year into the jar and can invest in almost anything you want--stocks, mutual funds, etc. (certain investments aren't allowed)--you can move the money around any way you like inside the jar, make as much money as you want, and as long as the money stays inside the jar, the IRS can't get their hands on it--until you take the money out of the jar, in the case of a NonRoth IRA. In the case of a Roth IRA, it even comes out of the jar tax free.

ez

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