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[[We early withdrew our money from an IRA to invest in stocks. The IRA was with Merrill Lynch
and we were
told we would have to liquidate this assett if we wanted to switch to another company. We were
not happy with the person handling our ccount, since he didnt seem to be working in our best

Not only that, it appears that he lied to you. I certainly don't know all of the facts surrounding this issue, but if you can PROVE that this person told you that you would have to close the account and withdraw the funds in order to purchase individual stocks, you may have a case for arbitration. Millions or people every day trade stocks in the IRA accounts...Merrill Lynch and all other brokers (discount and full service) certainly allow for such trading within the IRA account. So, at a minimum, there was a lot of confusion as to what was required to purchase stocks in this account. At worst, the situation is much more sinister.

[[ We closed the account. In Feb, we re-invested about 2/3 of this withdrawn money in the
Dow top yielders in accordance with the foolish four strategy. What else
can we do to minimize or offset our tax burden when 1999 tax time comes around?]]

This type of investment strategy will not reduce your tax burden. You'll have to take the taxable portion of the withdrawal and report it as income. You'll also be subject to a 10% penalty on the taxable portion of the funds removed. So you could be teed up for a tax hit.
You might want to have this entire siutation reviewed by a qualified tax pro in order to see what really happened, and what your estimated tax liability will be for 1998. He/she can then also help you with plans to reduce the tax hit.

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