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I contacted Ameritrade, w/ which I currently have a custodial account, and was informed that although they can't set up an IRA for a minor, they will be able to internally transfer the securities from my custodial account to a new IRA account when I reach majority. Finally, this brings me to the question: I assume that this transfer will count against my 2001 Roth contributions, but *what* exactly will count--the market value of the securities at the time of transfer, or my cost basis for the securities?

I wanted to clarify an assumption you made... If you make a contribution to an IRA before the date that taxes are due in April, 2001, you can have those contributions count for year 2000. Between January and April, you can contribute to either your year 2000 IRA OR you year 2001 IRA. Just make sure your broker knows what you want to do.

As far as what counts - I'm not sure if this applies to Ameritrade's "internal transfer" of securites or not, but I know that any new contributions to an IRA have to be made in cash, not stocks. When Ameritrade opens your new IRA account, they may very well be selling your securities, contributing the resulting cash to your new IRA, and then buying back the securities within your IRA. I'm sure Ameritrade will be able to give you a better understanding of how their "internal transfer" is going to work.

In any case, what are you going to be contributing to your new IRA?... The amount of money you originally invested years ago in your custodial account (the cost basis) or the amount of money you now have in your custodial account (the market value)?
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