Message Font: Serif | Sans-Serif
No. of Recommendations: 0
We opened an IRA (traditional) for my wife in August 1998 with a $2000 deposit, which we used to buy shares in The Gap. The $2000 has grown to about $3328.

In the course of working with our CPA to prepare our tax return, our CPA advised us that we cannot deduct the $2000 from our income because my wife is contributing to a pension plan at work. So we should have set up a Roth IRA back in August, because we don't get the advantage of a traditional IRA. (We didn't set up a Roth IRA in the first place because when we ran the numbers given my wife's age, etc. the traditional appeared better and we were not aware of the pension plan problem.)

WE called Ameritrade to see if we could convert to a Roth. Basically they said no. We'd have to sell the stock (I think that's what they said), withdraw the money, pay the penalty for withdrawing the money, and even pay the capital gains tax. If that is all true, we'll just leave it alone until my wife retires and start a Roth IRA in 1999.

Any thoughts?
Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.