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My tax adviser told me about a strategy I have not heard of before. I wondered what you think of it.
If you have an IRA account in which you hold stocks or mutual funds or both, and the market is at a low point, or for some other reason some of your holdings are depressed, that is a good time to move these holdings to an after-tax account. You will pay tax on the value when you move the securities, but your basis will be that same value instead of what you originally paid. When and if the securities appreciate, assuming they are held for 12 months or more, the tax rate will be the capital gains rate, and only the gain since moving will be taxed. If done at the right time, and assuming the securities are capable of long term gains, it would be better than leaving them in the IRA, selling them later, and eventually paying tax on the full amount.
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