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I currently am invested in a Vanguard Index fund. Can
I change from the mutual fund to a Roth IRA with the same fund family without any complications?
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<< I currently am invested in a Vanguard Index fund. Can I change from the mutual fund to a Roth IRA with the same fund family without any complications? >>

Standard answer to tax questions: it depends. "Mutual fund" and "Roth IRA" are not mutually exclusive. You can hold mutual funds within an IRA.

How is your current investment held--taxable account or IRA? If IRA, what kind of IRA? And what exactly is it that you want to do?

TMF ExRO
Phil Marti
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I don't have a reply to the question. Rather I'd like to tag onto the question, since mine is kind of an extension of the original.

I also want to transfer money from my mutual fund account into a Roth IRA. This is the only way I'll be able to make a Roth IRA contribution this year (no "extra" cash on hand!). My mutual fund account is a taxable account, and I've already been informed that the sale of shares will be a "taxable event."

I'd like any feedback anyone can offer as to whether or not this is a Foolish thing to do. It seems obvious that the long-term tax benefits of the Roth IRA will far outweigh any tax I'll have to pay on capital gains. But I want to be sure I'm not overlooking anything that is important for me to consider.

One additional piece of info. that may or may not be relevant: my mutual fund shares have been bought in small increments through regular monthly contributions. It will take some work to even figure out what my gain will be.

I'd appreciate any thoughts or insights anyone can offer.

Thanks.
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My account is a taxable acct. I want to convert it to a Roth IRA within the same company (Vanguard). However, I have just realized that I have approx. 3200 in the taxable acct. and the Roth IRA's Max. is 2000 per year. If I converted the 2000, I will not have enough to keep the taxable acct. open because the min.
amount for that acct. is 3000. Thanks for your reply. I will have to work on saving some more money to open the IRA.
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<< My account is a taxable acct. I want to convert it to a Roth IRA within the same company (Vanguard). >>

You can't do that. All IRA contributions must be in cash. To use (some of) your existing shares to fund the IRA, you'd have to sell them, incurring a gain or loss.

TMF ExRO
Phil Marti
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