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Greetings, Cliffordm, and welcome. You asked:

<<I will be faced with the "unfortunate" pleasure of rollover into a traditional IRA from my previous employer's 401(k) plan.

Also during my tenure employement, I had the opportunity to participate in the company stock purchase program. I have about 40 shares at a price around $36.00 in a taxable account (worth about $1,440). I thought this would be a good opportunity possibly transfer some stock that I had purchased during my employment. However, I am unclear on consequences:

Would the $1,440 worth of stock be counted against the 2,000 limit?

More concisely, how would the transfer be valued? >>

Well, I gotta admit I'm confused here. You have stock bought from the company that's now held in a taxable account? It's not part of a qualified retirement plan such as an Employee Stock Ownership Plan? You didn't make pre-tax contributions to a defined contribution plan and use those to buy the stock? If so, then you indeed have a taxable account. And in that case there is no way you will be able to transfer any of that stock to an IRA.

OTOH, if you bought that stock within an ESOP with money that was excluded from your pay for tax purposes, then those shares reside in a tax-deferred account within a qualified retirement plan. If that's the case, then you can transfer those shares (whole shares only) to a tradtional IRA and continue tax-deferral on any gain. You may not transfer them to a Roth IRA. Fractional shares will be paid out as cash, and that cash will also be transferred to the IRA. Alternatively, you can sell those shares prior to transfer, and only cash will go to the IRA. The transfer will in no way affect your ability to make an annual $2K contribution to an IRA.

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