UnThreaded | Threaded | Whole Thread (6) | Ignore Thread Prev Thread | Next Thread
Author: baeaton Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76418  
Subject: Roth IRA - Reinvested Stock Dividends? Date: 8/15/1999 1:41 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
I am considering opening up a Roth IRA account with an online broker and have been researching the regulations. I have read most of the IRS publication 590 (Zzzzzz)... I intend to use the F4 method.

The way I understand it, contributions to the account are taxable in the current year but are tax-free at the time of distribution at age 59.5. The issues I am not clear on are:

As I sell one stock to buy a new F4 stock are gains that I realize tax deferred like a traditional IRA or are they taxable in the current year?

Are dividends that I receive from my F4 stocks that I reinvest tax deferred or taxable in the current year?

Do reinvested dividends count aginst the legal limits for contributions to the Roth IRA. In other words if I receive $200 in dividends and reinvest them, does this mean that I can now only contribute $1,800 cash?

Thanks
Brad Eaton


Print the post Back To Top
Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13151 of 76418
Subject: Re: Roth IRA - Reinvested Stock Dividends? Date: 8/15/1999 9:22 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
Greetings, Brad, and welcome. You asked:

<<I am considering opening up a Roth IRA account with an online broker and have been researching the regulations. I have read most of the IRS publication 590 (Zzzzzz)... I intend to use the F4 method.

The way I understand it, contributions to the account are taxable in the current year but are tax-free at the time of distribution at age 59.5. >>


That's correct provided the account has been open for five tax-years prior to withdrawal of the earnings.

<<The issues I am not clear on are:

As I sell one stock to buy a new F4 stock are gains that I realize tax deferred like a traditional IRA or are they taxable in the current year?>>


Gains remain tax-deferred provided they are not withdrawn and stay inside the IRA.

<<Are dividends that I receive from my F4 stocks that I reinvest tax deferred or taxable in the current year?

They also remain tax-deferred.

<<Do reinvested dividends count aginst the legal limits for contributions to the Roth IRA. In other words if I receive $200 in dividends and reinvest them, does this mean that I can now only contribute $1,800 cash?>>

Gains and dividends within the IRA do not count against your annual contribution limit.

Regards..Pixy







Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post Back To Top
Author: stritza Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13162 of 76418
Subject: Re: Roth IRA - Reinvested Stock Dividends? Date: 8/16/1999 12:07 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
Hello -

First time poster, so I could easily be wrong, but I have a comment on:

*********
<<The issues I am not clear on are:

As I sell one stock to buy a new F4 stock are gains that I realize tax deferred like a
traditional IRA or are they taxable in the current year?>>

Gains remain tax-deferred provided they are not withdrawn and stay inside the IRA.

<Roth IRAs.

From the "All About IRAs - Roth Distributions" section:

Any qualified distribution from a Roth IRA is
NOT included in gross income for individual tax
purposes. Simple as that. In effect, a qualified
distribution from a Roth IRA is tax free... no taxes
due on the principal... no taxes due on the
earnings...no taxes due period.


If I'm wrong, please let me know, I'd hate to invest for the next 40 years (I'm 21) on bad-information about my Roth IRA!

Adam Stritzel

Print the post Back To Top
Author: stritza Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13163 of 76418
Subject: Re: Roth IRA - Reinvested Stock Dividends? Date: 8/16/1999 12:09 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
Sorry about my post there, it got a bit mangled, but I think you get the idea. I guess I'll put off trying my own tags (for itallics, etc.) until I'm a bit more experienced ;^)

It looked good when I hit "Post" though....

Print the post Back To Top
Author: tonyw44 Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13170 of 76418
Subject: Re: Roth IRA - Reinvested Stock Dividends? Date: 8/16/1999 9:53 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
Any gains, dividends, distributions, and such are tax deferred -- in other words, you don't pay them if you put the money in a Roth.

Print the post Back To Top
Author: x4a54 Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13172 of 76418
Subject: Re: Roth IRA - Reinvested Stock Dividends? Date: 8/16/1999 11:35 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
Adam,

If I'm wrong, please let me know, I'd hate to invest for the next 40 years (I'm
21) on bad-information about my Roth IRA!


thing about forty years : Congress giveth and the
Congress can taketh away.... at some point, enough of
the right sort of folks will have enough money to
put the Roth in the SacredCow pantheon. Until then,
the rules could be changed.


It looked good when I hit "Post" though....

just hit the "Preview" button, before the "submit"
until you get a sense of how it works...
(but we've definitely seen worse!)



jp

Print the post Back To Top
UnThreaded | Threaded | Whole Thread (6) | Ignore Thread Prev Thread | Next Thread
Advertisement