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Flitt, you asked:

I am interested in opening a self-directed Roth-IRA this year and was wondering if it is possible/Foolish to put $2000 in December for 1998 and another $2000 in January for 1999.

My thinking is that this would allow me a little more capital and the ability to try out one of the Dow Dividend approaches without getting hit as hard by commisions. I would just wait until January to make my picks.

That's some Foolish thinking on your part. It will indeed keep your costs down. And if you want, you can wait until January to make a single $4K deposit. All you have to do is say $2K is for tax year 1998 and $2K is for 1999. That's because you have until the time you must file (April 15) to make a contribution for 1998.

My second question is: Why can I only contribute $2000/yr to a Roth-IRA, but I can roll a regular IRA of any size into the Roth?

Aside from the fact that the law was written that way, you can rationalize it by saying in the years the traditional IRA was open it, too, could receive annual contributions of only $2K per year. Rollovers of any size from qualified retirement plans and IRAs have always been allowed in traditional IRA, but the annual contributions to those vehicles have always been restricted. The Roth is structured the same way.

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