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Author: zzyxxyzz Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 81642  
Subject: Re: Roth vs Common Stocks as Retirement Vehicle Date: 2/19/2004 7:18 PM
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Pondering - So as my non-Roth portfolio morphs over the years, I will be required to pay taxes on any securities sold during each year (even if sold for the purpose of buying other securities). I do not make the assumption that I, above all others, can precisely forcast companies that will be around 40 years hence, so I intuit there will be some trading, but always with the intent of LTBH. So, to the extent that I trade, I will be taxed intermittenly on realized earnings, as I trade to more suitable securities. Gotcha!

Post-Ponderance Question - Then, following taxation of realized earnings (for the purpose of reinvesting, of course), does the remaining earnings then become part of my investment basis (i.e. will those reinvested after-tax earnings ever be taxed again, ceteris paribus?)

I should mention that I'm not entirely confident about some of the aforementioned terminology (e.g. realization of earnings, investment basis). For the sake of clarity, I intended for realization of earnings to refer to an event whereby earnings become taxable, as when selling a security. Also, investment basis, in my regard, refers to the portion of a security holding not subject to additional taxes, since it's already either taxed income or taxed earnings.

I will apologize in advance for my long windedness and possible apparent redundancy, but I am unfallably adverse to being misunderstood...as my fellow Fools shall soon come to know.

Thanx, a mil!

You inquisitively ask: Zzyxxyzz. Y?
My nonchalant response: O, xxyzz.
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