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Author: ICHIMNU Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75532  
Subject: short-term OK for 1st-yr Roth? Date: 1/11/2000 11:39 AM
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1st-timer I just started up Roth IRAs w/a famous online disc. broker, for my wife & myself. I should be able to trade on both eff. Jan. 20th. I intend to utilize the RP4 variation. FOOL: Thank you for making it so simple!

?: What is the potential tax loss if I were to reconfigure my holdings on Dec. 1st, 2000; instead of holding them until Jan. 22nd, 2001. Wouldn't it prudent to do so before the accounts have had time to appreciate? (& thus set my account up for the next 25 years of 366 day holding periods).
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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: 17646 of 75532
Subject: Re: short-term OK for 1st-yr Roth? Date: 1/11/2000 12:55 PM
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Greetings, ICHIMNU, and welcome to the Fool!

What is the potential tax loss ...

There are no tax consequences within an IRA. With the Roth, you paid taxes on the money before you deposited it. With a Regular IRA, you pay at withdrawal. With both, all transactions inside the IRA have no tax consequences.

Your strategy could make some sense in a taxable account. I think a simpler plan is to sell at 11 months some year when you have a loss. (And in 25 years, you should expect some losses.)

Fool on!

Michael

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