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Author: Trevar Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121219  
Subject: Roth IRA Question Date: 3/10/1999 12:08 AM
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I have a Vanguard fund in my Roth IRA. Vanguard just announced a sizeable capital gains distribution for this particular fund. The distribution will be reinvested in my Roth IRA, according to the reinvest option I selected when I opened the account. I realize that, provided that I am at least 59 1/2 and the account is at least 5 years old when I start taking distributions (a dozen or so years from now), I won't pay regular income taxes on the distributions, but will the reinvested capital gains also be tax-free? I find that hard to believe -- it's like free money. Please tell me it's true....

Trevar
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Author: UUinMN Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 11837 of 121219
Subject: Re: Roth IRA Question Date: 3/10/1999 11:08 AM
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It's true, it's true! Every dollar you take out, subject to the "provided" clause you use, is tax-free.

Thank you, Senator Roth!

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Author: Trevar Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 11891 of 121219
Subject: Re: Roth IRA Question Date: 3/10/1999 6:31 PM
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It's true, it's true! Every dollar you take out, subject to the "provided" clause you use, is tax-free.

Thank you! Thank you! Thank you! I'm going out to dinner tonight!

Trevar

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Author: yukonzz One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 12016 of 121219
Subject: Re: Roth IRA Question Date: 3/12/1999 2:02 AM
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It's true, but lets just hope that we don't end up with a "flat tax rate" 20 years from now when there may no longer be a capital gains tax. yukon

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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: 12060 of 121219
Subject: Re: Roth IRA Question Date: 3/12/1999 10:22 PM
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[[ I have a Vanguard fund in my Roth IRA. Vanguard just announced a sizeable
capital gains distribution for this particular fund. The distribution will be
reinvested in my Roth IRA, according to the reinvest option I selected when I
opened the account. I realize that, provided that I am at least 59 1/2 and the
account is at least 5 years old when I start taking distributions (a dozen or so
years from now), I won't pay regular income taxes on the distributions, but will
the reinvested capital gains also be tax-free?]]


Yup...assuming that your distribution from your Roth IRA is qualified, then the earnings will be distributed to you free from federal taxes...at least the way the law is currently written.

[[ I find that hard to believe -- it's like
free money. Please tell me it's true....]]

It's true. Happy, Happy, Joy, Joy!!!

You can read more about Roth IRA tax issues in my series of posts on the Roth IRA in the Taxes FAQ area.

TMF Taxes
Roy

Want to learn more about taxes and investing? Then we have a deal for you!! The Motley Fool Investment Tax Guide is now available through Fool Mart. Be the first one on your block to own this masterpiece. It'll help you with your 1998 taxes, and it's never to early to start planning for your 1999 taxes. So just click on this link (http://www.foolmart.com/market/product.asp?pfid=MF+013+I) to read more about this amazing collection of tax information. (Apologies for the shameless plug…but it is a pretty good book…if I do say so myself). In addition, if you would like to visit the Taxes FAQ (Frequently Asked Questions) area, click on http://www.fool.com/school/taxes/taxes.htm and you'll be right at the home page. Check it out. Finally, if you need to get to the IRS web site, click on http://www.irs.ustreas.gov to go directly there.


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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: 12061 of 121219
Subject: Re: Roth IRA Question Date: 3/12/1999 10:22 PM
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[[ I have a Vanguard fund in my Roth IRA. Vanguard just announced a sizeable
capital gains distribution for this particular fund. The distribution will be
reinvested in my Roth IRA, according to the reinvest option I selected when I
opened the account. I realize that, provided that I am at least 59 1/2 and the
account is at least 5 years old when I start taking distributions (a dozen or so
years from now), I won't pay regular income taxes on the distributions, but will
the reinvested capital gains also be tax-free?]]


Yup...assuming that your distribution from your Roth IRA is qualified, then the earnings will be distributed to you free from federal taxes...at least the way the law is currently written.

[[ I find that hard to believe -- it's like
free money. Please tell me it's true....]]

It's true. Happy, Happy, Joy, Joy!!!

You can read more about Roth IRA tax issues in my series of posts on the Roth IRA in the Taxes FAQ area.

TMF Taxes
Roy

Want to learn more about taxes and investing? Then we have a deal for you!! The Motley Fool Investment Tax Guide is now available through Fool Mart. Be the first one on your block to own this masterpiece. It'll help you with your 1998 taxes, and it's never to early to start planning for your 1999 taxes. So just click on this link (http://www.foolmart.com/market/product.asp?pfid=MF+013+I) to read more about this amazing collection of tax information. (Apologies for the shameless plug…but it is a pretty good book…if I do say so myself). In addition, if you would like to visit the Taxes FAQ (Frequently Asked Questions) area, click on http://www.fool.com/school/taxes/taxes.htm and you'll be right at the home page. Check it out. Finally, if you need to get to the IRS web site, click on http://www.irs.ustreas.gov to go directly there.

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