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Author: GeraldGarcia Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75340  
Subject: Traditional to Roth Tax Conversion Question Date: 1/30/2000 8:03 PM
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Since no capital gains are paid on IRA investments, is it be possible to invest traditional IRA funds into tax-advantaged/tax-free securities to reduce/avoid paying tax on a traditional IRA to Roth IRA conversion?
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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: 18503 of 75340
Subject: Re: Traditional to Roth Tax Conversion Question Date: 1/31/2000 9:43 AM
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Greetings, GeraldGarcia, and welcome. You asked:

<<Since no capital gains are paid on IRA investments, is it be possible to invest traditional IRA funds into tax-advantaged/tax-free securities to reduce/avoid paying tax on a traditional IRA to Roth IRA conversion?>>

You will not really avoid income taxes that way because you lose the tax advantage of those investments within the IRA. ANY gain in a traditional IRA regardless of source will be treated as and taxed as ordinary income when you withdraw that money in retirement or during a conversion to a Roth IRA.

Regards..Pixy

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