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Author: pmarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121597  
Subject: Re: Can I convey already-owned stock to an IRA? Date: 11/5/1999 7:25 PM
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<< I'm 31, I make $190k and I've been buying tech stocks for a few years (MSFTs, INTCs, CSCOs). I don't sell. Because I don't sell, I haven't seen the need for an IRA (I'm disqualified from any tax deduction -- I think). However, the speculative bug has hit me recently, so I think I'll dabble and shield my winnings from capital gains taxes. >>

Are you covered by any sort of pension plan, including 401(k)'s, at work? If not, an IRA contribution is deductible. Even if you can't make a deductible IRA contribution or participate in a Roth, you can still defer taxation on gains in the IRA unitl you retire.

<< My question is: Can I convey my $2,000 contribution to the IRA in the form of already-owned stock? Would it be considered a sale (complete with capital gains) and a subsequent purchase or would my basis in the stock be the purchase price I paid before I set up the IRA? >>

It's a change in ownership, from you to the IRA custodian for your benefit. Sorry, you'd have to recognize the gain.

Phil Marti
Tax Preparer
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