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<<<< If I can earn 15% annually on that money, and I'm paying 6% annually in the form of tax, do I get the rest tax free? If I earn more than 15% on the assets, and I'm in the highest tax bracket, this would easily work to my advantage. It would allow one to shelter short term gains and not pay as much tax as one would pay if they were in a taxable account. >>


One other point on this issue...if you try it, you're running a BIG risk. An overcontribution is always an overcontribution. And if IRS finds out about it, they can FORCE you to remove the funds and associated earnings...thereby causing you some big tax and penalty problems.

And, not only that, unless your IRA administrator is a complete dummy, they won't let you make...say...a $50,000 contribution to your IRA...when the annual limit is $2k. You could lie to them, of course, and say that it was a rollover. But because of the paperwork required (and reports required to be filed with the IRS by the administrator), it could tip the IRS off to your little plan. And, since there is not "statute of limitations" to requiring the removal of the overcontribution, Uncle Sammy wouldn't necessarily be in any hurry to check you out.

Don't do it. Please.

TMF Taxes
Roy
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