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I recently left a job and put about $15K from my last employers 401K into a standard IRA Rollover acct. with an on-line broker.

I'm not employed now, but likely will be within 6-9 months or so and hopefully will be able to rollover the rollover IRA into my next company's 401K plan.

Are there any limitations to how or what I can invest the 15K in this interim time frame? If I invest in stocks, and the stocks are held < 1 yr, are the gains subject to standard LT/ST gain rules?

Thanks, sjensen12
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So long as the gains occur in a 401K or IRA plan, there is no tax liability for the capital gains when they are realized. You will pay regular income taxes (not capital gains) on any untaxed contributions or gains when they are removed from the account (usually after age 59-1/2).

Your IRA custodian can advise you of their limitations on your account. Usually almost any stock, bond, mutual fund, CD, etc investment is allowed. The limits are very broad.
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Thanks Paul,

Who is my IRA custodian? I opened an IRA Rollover acct. at e-trade, would my IRA custodian by any chance happen to be a human being?? ;) thanks again.
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Yep, e-trade is your custodian and they must have some rules somewhere. Otherwise, try whatever you like. They will probably tell you if they think you are breaking one of the rules.
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Thanks again Paul,

I would presume that it is then best to keep the IRA acct. a completely separate cash acct. and not move funds or stocks from my other etrade margin acct. to or from the IRA acct.?

I would presume that beefing up the IRA acct. from non IRA accounts would make bookeeping a nightmare if or when trying to roll back into an employers 401K, if possible at all at that stage?

Thanks.
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SJensen12 writes:

<<I would presume that it is then best to keep the IRA acct. a completely separate cash acct. and not move funds or stocks from my other etrade margin acct. to or from the IRA acct.?

I would presume that beefing up the IRA acct. from non IRA accounts would make bookeeping a nightmare if or when trying to roll back into an employers 401K, if possible at all at that stage?>>


Assuming you intend to transfer that money into a future employer's 401k plan (and assuming that plan accepts transfers from other qualified retirement plans), then you cannot add any other money to that rollover/conduit IRA. The addition of annual contributions or rollovers from other IRAs automatically disqualifies your rollover/conduit IRA from a future transfer to a new employer's plan.

See the IRA discussion in my Foolish Retirement Plan Primer at http://www.fool.com/Retirement/Retirement.htm for details.

Regards..Pixy
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"I recently left a job and put about $15K from my last employers 401K into a standard IRA Rollover acct. with an on-line broker."

"I'm not employed now, but likely will be within 6-9 months or so and hopefully will be able to rollover the rollover IRA into my next company's 401K plan."


In rolling back into a new employer's 401K, you should take a very good look at the company and at the 401K plan they offer. Some company plans do offer some very good investment funds and do pick up some of the investment costs but some firms offer very limited investments.

An IRA with a discount broker like Waterhouse does not charge a maintenance fee and you have a very large variety of investment choices.

I am also concerned with the financial history of small firms. It has happened that some firms have misused the 401k - went out of business and not only did the employee lose their jobs, they lost their 401K.

There are a few advantages to rolling back into another company's 401K but I would be hesitant to do such with my own retirement IRA.

BGP

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