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<< This seems a little bogus to me but, is it the gov't. or the mutual fund company? >>

Oh, if it only was bogus.

It's true. Until the IRS/government ties up some loose ends regarding comingling of Roth conversion money and subsequent annual contributions (has to do with which money can be withdrawn in five years without penalty), the IRS has *recommended* (not mandated) that annual contributions to the Roth IRA be kept separate from monies that were converted to the Roth.

Almost everyone offering Roth IRA's (brokers, banks, mutual funds) have taken this recommendation to heart (some would say they are being overcautious). I guess they don't want to be sued for misinforming their customers.

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