Roth IRA, Traditional IRA, 401K » Capital http://www.iraroth.net IRA Questions and Answers Tue, 17 Jan 2012 00:09:43 +0000 en hourly 1 http://wordpress.org/?v=3.3.1 What to do with the capital gain from the excess roth IRA contribtution? http://www.iraroth.net/2011/10/what-to-do-with-the-capital-gain-from-the-excess-roth-ira-contribtution/ http://www.iraroth.net/2011/10/what-to-do-with-the-capital-gain-from-the-excess-roth-ira-contribtution/#comments Sun, 30 Oct 2011 22:46:25 +0000 admin http://www.iraroth.net/2011/10/what-to-do-with-the-capital-gain-from-the-excess-roth-ira-contribtution/ Question by NewIntheCity: What to do with the capital gain from the excess roth IRA contribtution?
I overcontributed $ 1200 to my roth IRA for 2006. This contribution has made some capital gain. I understand that I need to file a IRA distribution to take out the excess contribution to avoid IRA penalty. However, what should I do with the gain from the excess contribution?

Thanks,

Best answer:

Answer by jerry
Earnings on the excess will be considered as received in the year the contribution was made, and are taxable for that year, plus the 10% penalty (assuming you are under 59 1/2).

You can possibly avoid the excise tax if you more the excess Roth contribution and the earnings on the excess either by transferring to a regular IRA (trustee-to- trustee) before the deadline for the year in which the contribution is made.

I would probably suggest contacting your IRA broker to see if they can help you out and offer any alternatives.

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]]> http://www.iraroth.net/2011/10/what-to-do-with-the-capital-gain-from-the-excess-roth-ira-contribtution/feed/ 0 Where is the best place to put Roth IRA money with objective of preserving capital? http://www.iraroth.net/2011/09/where-is-the-best-place-to-put-roth-ira-money-with-objective-of-preserving-capital/ http://www.iraroth.net/2011/09/where-is-the-best-place-to-put-roth-ira-money-with-objective-of-preserving-capital/#comments Fri, 23 Sep 2011 22:05:58 +0000 admin http://www.iraroth.net/2011/09/where-is-the-best-place-to-put-roth-ira-money-with-objective-of-preserving-capital/ Question by Set: Where is the best place to put Roth IRA money with objective of preserving capital?
Regarding a Roth IRA investment; does buying a Tax Exempt Bond make sense over a Taxable Bond Fund? At this time, which is better; Short, Long, or Intermediate Term? Do you have any specific recommendations within the Vanguard family of funds? Right now everything is in a money market fund. Thanks in advance.

Best answer:

Answer by richard t
the roth is tax free.you pay going in..no tax coming out……………..tax exempt is not for you…………you do not say what your time horizon is………………preservation of capital…the safe way is treasury bills, bonds and notes……………don’t buy anything with more than a 2year maturity and buy some every couple of months to hit the average………….If you have a lot of time till retirement. you might want to risk a bit more,,pick up ”the little book that beats the market’…..it sets you thinking…………..
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]]> http://www.iraroth.net/2011/09/where-is-the-best-place-to-put-roth-ira-money-with-objective-of-preserving-capital/feed/ 3 Q&A: When calculating income for Roth IRA eligibility, do capital gains count toward the total? http://www.iraroth.net/2011/04/qa-when-calculating-income-for-roth-ira-eligibility-do-capital-gains-count-toward-the-total/ http://www.iraroth.net/2011/04/qa-when-calculating-income-for-roth-ira-eligibility-do-capital-gains-count-toward-the-total/#comments Mon, 04 Apr 2011 22:23:23 +0000 admin http://www.iraroth.net/2011/04/qa-when-calculating-income-for-roth-ira-eligibility-do-capital-gains-count-toward-the-total/ Question by roth: When calculating income for Roth IRA eligibility, do capital gains count toward the total?
I know about the 99k-114k phaseout for single filers in 2007. So for example, if you made 90k in salary and had 25k in capital gains would you be able to contribute to a Roth IRA?

Best answer:

Answer by Spock (rhp)
capital gains do count

see IRS Pub 590 for the details of how to modify AGI for this calculation

http://www.irs.gov/publications/p590/ch02.html#d0e9254

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]]> http://www.iraroth.net/2011/04/qa-when-calculating-income-for-roth-ira-eligibility-do-capital-gains-count-toward-the-total/feed/ 0 Foreign earned income exclusion and Traditional IRA to Roth IRA conversion taxes/ capital gains? http://www.iraroth.net/2011/03/foreign-earned-income-exclusion-and-traditional-ira-to-roth-ira-conversion-taxes-capital-gains-2/ http://www.iraroth.net/2011/03/foreign-earned-income-exclusion-and-traditional-ira-to-roth-ira-conversion-taxes-capital-gains-2/#comments Wed, 23 Mar 2011 22:24:09 +0000 admin http://www.iraroth.net/2011/03/foreign-earned-income-exclusion-and-traditional-ira-to-roth-ira-conversion-taxes-capital-gains-2/ Question by jekelnHide: Foreign earned income exclusion and Traditional IRA to Roth IRA conversion taxes/ capital gains?
I qualify for foreign earned income exclusion. This shows as a negative on income on the tax form. If I convert a traditional IRA to a Roth IRA, the IRS will withhold some taxes. Since my income is negative, can I get these taxes back at the end of the year? Alternatively, can my negative income offset capital gain taxes?
Using the Turbotax program, it takes the value from form 2555, and places it as a negative number in form 1040. Reading the instructions from form 2555, it says to place the value in parenthesis which indicates a negative, correct?

Best answer:

Answer by Jss
How can you have negative income unless you have loss from business or capital loss?
Just making sure that you are doing Form 2555 correctly.

Yes, it is always better to withdraw from IRA only when you have minimum income
For articles on your U.S. tax return, http://taxipay.blogspot.com/2008/04/list-of-articles.html

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]]> http://www.iraroth.net/2011/03/foreign-earned-income-exclusion-and-traditional-ira-to-roth-ira-conversion-taxes-capital-gains-2/feed/ 1 Foreign earned income exclusion and Traditional IRA to Roth IRA conversion taxes/ capital gains? http://www.iraroth.net/2010/08/foreign-earned-income-exclusion-and-traditional-ira-to-roth-ira-conversion-taxes-capital-gains/ http://www.iraroth.net/2010/08/foreign-earned-income-exclusion-and-traditional-ira-to-roth-ira-conversion-taxes-capital-gains/#comments Thu, 19 Aug 2010 04:42:03 +0000 admin http://www.iraroth.net/2010/08/foreign-earned-income-exclusion-and-traditional-ira-to-roth-ira-conversion-taxes-capital-gains/ I qualify for foreign earned income exclusion. This shows as a negative on income on the tax form. If I convert a traditional IRA to a Roth IRA, the IRS will withhold some taxes. Since my income is negative, can I get these taxes back at the end of the year? Alternatively, can my negative income offset capital gain taxes?
Using the Turbotax program, it takes the value from form 2555, and places it as a negative number in form 1040. Reading the instructions from form 2555, it says to place the value in parenthesis which indicates a negative, correct?

]]> http://www.iraroth.net/2010/08/foreign-earned-income-exclusion-and-traditional-ira-to-roth-ira-conversion-taxes-capital-gains/feed/ 2 Simply Money: Roth IRA and capital gains http://www.iraroth.net/2010/03/simply-money-roth-ira-and-capital-gains/ http://www.iraroth.net/2010/03/simply-money-roth-ira-and-capital-gains/#comments Mon, 29 Mar 2010 00:37:46 +0000 admin http://www.iraroth.net/2010/03/simply-money-roth-ira-and-capital-gains/ Simply Money: Roth IRA and capital gains
Are capital gains shielded in a Roth IRA? If the funds meet with the approval of the IRA custodian, that should work.

Read more on The Cincinnati Enquirer

]]> http://www.iraroth.net/2010/03/simply-money-roth-ira-and-capital-gains/feed/ 0 When calculating income for Roth IRA eligibility, do capital gains count toward the total? http://www.iraroth.net/2010/01/when-calculating-income-for-roth-ira-eligibility-do-capital-gains-count-toward-the-total/ http://www.iraroth.net/2010/01/when-calculating-income-for-roth-ira-eligibility-do-capital-gains-count-toward-the-total/#comments Sun, 03 Jan 2010 16:31:27 +0000 admin http://www.iraroth.net/2010/01/when-calculating-income-for-roth-ira-eligibility-do-capital-gains-count-toward-the-total/ I know about the 99k-114k phaseout for single filers in 2007. So for example, if you made 90k in salary and had 25k in capital gains would you be able to contribute to a Roth IRA?

]]> http://www.iraroth.net/2010/01/when-calculating-income-for-roth-ira-eligibility-do-capital-gains-count-toward-the-total/feed/ 1 How are Capital Gains treated in a Traditional IRA if one waits until age 59.5 (or later) to make withdrawals? http://www.iraroth.net/2009/12/how-are-capital-gains-treated-in-a-traditional-ira-if-one-waits-until-age-59-5-or-later-to-make-withdrawals/ http://www.iraroth.net/2009/12/how-are-capital-gains-treated-in-a-traditional-ira-if-one-waits-until-age-59-5-or-later-to-make-withdrawals/#comments Fri, 04 Dec 2009 03:18:11 +0000 admin http://www.iraroth.net/2009/12/how-are-capital-gains-treated-in-a-traditional-ira-if-one-waits-until-age-59-5-or-later-to-make-withdrawals/ Imagine two people starting with 2,000 pre-tax dollars to invest at age twenty-five. The tax rate is a constant 25 %, and the capital gains rate is constantly 15 %.One person invests in the ROTH IRA (for 1,500 dollars because of the tax), and one invests in the Traditional IRA. If the annual rate of return for each investor is 8%, who does better in the end if retirement is age 70, exactly 45 years later?

]]> http://www.iraroth.net/2009/12/how-are-capital-gains-treated-in-a-traditional-ira-if-one-waits-until-age-59-5-or-later-to-make-withdrawals/feed/ 3