Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (2) | Ignore Thread Prev | Next
Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121594  
Subject: Re: Foolish Four IRA? Date: 5/22/1997 3:57 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 2
On Thu, 22 May 97 12:27:21 -0600, jamerz wrote:
<<

I have recently purchased the Foolish Four through my discount broker. Can I now take those four stocks and separate them from the rest of my securities as an IRA? And if so, will I avoid paying capital gains taxes each year when I turn the portfolio over?

Also, how do you feel about selling call options on Foolish Four holdings, say, three months before it's time to turn the portfolio over? And can this strategy be used in an IRA?>>

You are only allowed to establish an IRA account when you are qualified to do so. You can not simply "carve out" a portion of your portfolio and transfer that part of your portfolio into an IRA account.

If you ARE able to make IRA contributions (generally $2,000 per year...could be deductible...maybe not depending upon your specific circumstances), and are able to build up your account to such an extent to handle your Foolish 4 investments, you will then be able to purchase those investment directly in the IRA. And, as you correctly point out, any gains in an IRA account are not subject to tax until the money is taken out of the IRA. Makes the recordkeeping VERY easy.

As far as the options strategy, you might want to take that question over to TMF DowMan, the Foolish 4 specialists. To my thinking, it doesn't make any sense. First, it invalidates the modes. Second, I don't quite see the point of it all. But I'm biased against options for most people, so my response may be somewhat tainted.

TMF Taxes
Roy Lewis
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (2) | Ignore Thread Prev | Next

Announcements

Disclaimer:
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.
Foolanthropy 2014!
By working with young, first-time moms, Nurse-Family Partnership is able to truly change lives – for generations to come.
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.
Post of the Day:
Macro Economics

Looking at Currency Ratios
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! 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.
Advertisement