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Author: tommc Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76398  
Subject: Is there a capital gains tax rate? Date: 12/16/1999 8:02 PM
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for conversions of traditional IRA into Roth Ira? If I held a stock in a traditional IRA over 12 months and convert all this money into a Roth is the gain taxed at income tax rate or capital gains rate?
Or if I held it for 6 months in a traditional IRA and 6 months in the Roth after conversion is the gain taxed at income tax rates or capital gains rates?
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Author: Bob78164 Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 16444 of 76398
Subject: Re: Is there a capital gains tax rate? Date: 12/16/1999 10:46 PM
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tommc writes (in part):

for conversions of traditional IRA into Roth Ira? If I held a stock in a traditional IRA over 12 months and convert all this money into a Roth is the gain taxed at income tax rate or capital gains rate?

I reply:

Taxable distributions from an IRA are always taxed as ordinary income, and never as capital gains. That's the reasoning behind intercst's advice that non-deductible IRAs are inferior to taxable buy-and-hold accounts. (By the way, I tend to differ, primarily because I hope that Congress will do away with the $100,000 modified AGI limit on conversions, allowing me to place more into a Roth.) --Bob

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