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Author: morris66 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76101  
Subject: REALITY CHECK TO A ROTHIRA Date: 12/10/1998 5:20 PM
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Ann Coleman announced the decision to but $4000 in her ira with the foolish four plan. She also
said it was coincidence that $4ooo is equal to a married couple's IRA contibution, and furthermore
that the stocks will be announced on the 23rd of this month and bought within 5 days. My question
is how will she have $4000 in her porfolio if you cannot have a joint Roth IRA account for
husbands and wives, and furthermore, you may deposit $2000 for 1998 between now and April
and another $2000 for 99 anytime after, Jan 4, but this will not fall within the time of when she
buys, and when I start, I would like to just write one check.. Is she going to have an account for
her husband with $2000 that buys the first 2 foolish four and she will buy the foolish four- three and
four picks. I want to follow right along, but if I am just starting out my Roth IRA, how can you
have $4000 in our account and still pick 5 days after DEC. 23rd? Finally, does the $8 commission
for my trades have to be included in my $2000 contribution, or can I send in $2032 since we will
be buying four different stocks? Thanks for any help
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Author: zgriner Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 7181 of 76101
Subject: Re: REALITY CHECK TO A ROTHIRA Date: 12/10/1998 11:06 PM
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...Finally, does the $8 commission for my trades have to be included in my $2000 contribution, or can I send in $2032 since we will be buying four different stocks?

Sorry, your commission or any other expense must come out of your IRA funds. Otherwise, the extra funds used to pay the expenses are considered IRA contributions and you would be subject to penalties if you have already contributed your maximum for the year.

Zev

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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 7188 of 76101
Subject: Re: REALITY CHECK TO A ROTHIRA Date: 12/11/1998 9:39 AM
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Greetings, Morris66, and welcome. You asked:

<<Ann Coleman announced the decision to but $4000 in her ira with the foolish four plan. She also said it was coincidence that $4ooo is equal to a married couple's IRA contibution, and furthermore that the stocks will be announced on the 23rd of this month and bought within 5 days. My question is how will she have $4000 in her porfolio if you cannot have a joint Roth IRA account for husbands and wives, and furthermore, you may deposit $2000 for 1998 between now and April and another $2000 for 99 anytime after, Jan 4, but this will not fall within the time of when she
buys, and when I start, I would like to just write one check.. >>


I have no idea from whence comes the $4K Ann will be using. My suspicion is it will be from money already in her IRA or perhaps a combination of a new deposit and existing money. Seeing as it's not my account or my announcement, maybe you should ask Ann herself.

<<Is she going to have an account for her husband with $2000 that buys the first 2 foolish four and she will buy the foolish four- three and four picks. I want to follow right along, but if I am just starting out my Roth IRA, how can you have $4000 in our account and still pick 5 days after DEC. 23rd?>>

Again, you'll have to ask Ann about her account particulars. For your account, you'll have to wait until 1/1/99 to deposit $4K, $2K for 1998 and $2K for 1999. Be aware that you don't have to buy on the same day Ann does. In fact, you won't know when she will buy until after the fact. I didn't read her announcement, but my bet is she said she would make her purchases "within" five days, which is on any business day. If you want to use the Foolish Four, just make your purchase on the day the money reaches the account.

<< Finally, does the $8 commission for my trades have to be included in my $2000 contribution, or can I send in $2032 since we will be buying four different stocks?>>

No, you cannot. As Zev aka Zgriner said, trading fees must be paid with money inside the IRA. If you pay from your checkbook, that payment will be counted as part of your annual contribution. The annual contribution is limited to $2K. Thus, assuming you already contributed $2K, the payment would cause an excess contribution. You would be penalized 6% of that amount each and every year until it was removed.

Regards….Pixy



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