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I have some stock from a stock purchase plan that has appreciated, and I need to divest (too much $ in one stock).
I am planning to put money into an IRA for 2010 (2010 non-deduc. traditional contribution, roll over to Roth in 2011 tax year)

Is it possible to avoid the cap gains taxes by funding the IRA with stock, then once it's within the Roth, selling it to buy other investments?

I'm sure there's some reason this can't be done - otherwise I'd think there'd be suggestions to do so in various magazine articles, etc.

So what prevents it from being done - or - why is it a bad idea?
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