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Looking for some help from all you tax strategists......

My wife and I no longer qualify for a Roth contribution, however, we still want to sock money away for retirement and/or miscellaneous near-term(0-5 years) expenses. I see us as having 2 options:

1. Traditional IRA, non-deductible contribution (means filing Form 8606 each year with our taxes).
Pro: Don't have to keep track of capital gains issues, tax-deferred growth.

Con: Accessibility of funds -however it appears that the non-deductible portion of the IRA (basis) can be withdrawn at any time without penalty....if I'm wrong, please correct me.

Consider yourself corrected. All withdrawals from a traditional IRA with basis (that is, that contains non-deductible contributions) are part taxable, part non-taxable. See IRS Pub. 590, Individual Retirement Arrangements,

2. Standard brokerage account.
Pro: Accessibility of funds -can get the money whenever you want it.

Con: Have to keep track of when stock bought/sold, pay capital gains, etc. This sounds like a huge pain in the butt. I've spent quite a bit of time on the IRS website just trying to find the capital gains tax rate tables for short and long-term investments and the only publications I've found (including the instructions to Sched D.) are incomprehensible. I've also looked for some kind of plain-language guidance document to indicate how to treat stock purchases and sales (FIFO vs. LIFO), etc, but again, all I've found is gobbledegook. My whole experience looking at the IRS website makes me think the only way to invest is with tax-deferred accounts.

So, my questions are:
1. Can the basis of an IRA be withdrawn at any time (including years down the road) without penalty or tax?

Answered above.

2. When using a standard brokerage account, how do you keep track of all your transactions and compute your capital gains (FIFO? LIFO?). Is there a website (other than IRS.GOV!!) or book that can guide me.

You keep copies of every purchase confirmation. If you don't specify otherwise at the time of the sale and receive confirmation from your broker, all sales are FIFO. Any "investing for dummies" type book, IRS Pub. 550, Investment Income and Expenses,, and the Fool's own Motley Fool Investment Guide should provide the information you're looking for. (If not the MFIG, then I think they've also published a Tax Guide).

3. Where can I find a functional tax-rate table as it applies to short term and long-term capital gains (and losses).

Easy. Short-term capital gains are taxed like ordinary income. It's no different from wages or interest. Long-term capital gains are taxed at 5% or 15% -- 5% if your taxable income falls within the 10% or 15% bracket, 15% if you're in a higher tax bracket. The 5% capital gains rate disappears in 2008. Capital gains rates change in 2009 to 10% and 20%.

I'm sure these issues/questions have come up before and I've tried to find some old posts/articles on the Fool website but their new search engine is not that great (I hear their working on it), so if anyone can point me in the right direction, I'd appreciate it.

Don't forget to check the links to the right to the Fool's tax center. It should have everything you need and more.

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