What types of contributions are possible? Cash only? Or are other types of assets allowed? What are the rules?

You fund a contributory IRA with cash. Transfers of other assets like stocks or bonds are not allowed.

IRA contributions -- the ones that are subject to the annual limitations -- must be made with cash. The authority is I.R.C. Sec. 408(a)(1). Rollovers to IRAs, however, can be made in-kind.

It would be quite nice if you could contribute non-cash assets to Roth IRA's, especially those which have appreciated in value and on which you would owe taxes. However, unfortunately, it is most likely for this reason that you aren't allowed to do such.

I wouldn't ever expect that much. All assets are valued at current replacement value to avoid just this issue.

OTOH it would still be excellent to be able to transfer equivalent value in stocks rather than having to first cash out, incurring capital gains and transaction costs along the way. I believe some Canadian retirement accounts do allow this.

IRS Publication 590: http://www.irs.gov/pub/irs-pdf/p590.pdf

Star and DH - you already have an excellant tax shelter in a Roth. Think of what folks would do if they could transfer shares from a taxable account to a Roth. I own two stocks that are up more than 5x in the past three years... every share would get flipped to a Roth. It would be a huge tax loophole. With LT capital gains taxes at 15%, complaining does not sound good.

Contributory Roths are just that - contributory. Congress gives you the option to shelter $4k a year. That is enough to build a $2 million dollar nest egg PER PERSON, if the tax payer funds the Roth at the full amount for 41 years and gets an average return of 10% per year. Make that $4 M if a husband and wife both contribute the max. I would hope we can all agree that everyone outside of Donald Trump and Michael Jackson can probably live on that.

I have always wondered if the Roth was "invented" in part to help use get out of the social security inbalance. Folks that have a $4 M nest egg are not going to worry a lot about their SSN check.

Oh, I guess this is just another Friday night rant.

PS: folks that push hard on building a Roth nest egg get a couple of extra benefits. . . . no reporting on buy/sells in the Roth, no distinction between long/short term or dividends.