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I know that there is no legal proscription against mixing deductible IRA contributions with non-deductible contributions in the same IRA account, but I do no understand how the withdrawal procedure works in such instances for determining whether taxes are owed or not on the contribution amounts. Does mixing the contribution types create a record keeping nightmare when it comes time for withdrawals because taxes will be owed on some of the contributions but not on others? Is the record keeping problem solved by simply investing the different type of contributions into different funds or stocks so when you liquidate one security for withdrawals you'll know what type of contributions went into it originally? If a person is liquidating two investments in preparation for a withdrawals, one funded by deductible contributions and the other by non-deductible contributions, with the cash from the sale going into the same money market fund, is there some rule regarding whether the deductible or non-deductible contributions come out first? Any insight into this would be appreciated so I'll know whether I should mix our deductible and non-deductible contributions or keep them separate as is currently the case. Thank you.
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