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Nope, no sweat on that. It just gets reinvested.
Not a taxable event.

Weird! So if you didn't have automatic dividend reinvestment, but just got the dividends in cash, and then invested them yourself, you'd have to pay taxes on them and they would count towards the $2000 cap?

Sounds like dividend reinvestment for Roth IRAs is a cool deal. You get to escape taxes on the dividends and you can add more than $2000 per year to the IRA.

- Kiri

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