I am new to the ROTH IRA field. This may be a simple question for most of you. I received some Contingent Convertible Shares in an IPO. The shares are restricted and will not convert to common shares until the Company has met certain performance levels. The shares will lapse on December 31, 2008, if the performance is not achieved. The question is how do I transfer the shares to a ROTH IRA? MY thoughts are as follows:
1) Contribute directly - The problem is can you contribute stock to a ROTH IRA and how do you value it.

2) Contribute Cash and buy the shares as an investment.

Any thoughts would be appreciated.

You contribute cash to a Roth.

I believe you will not find a custodian that will allow you to buy something from yourself - there are many issues and the potential for serious abuse related to "self dealing". If this door was left open, folks could sell discounted privately held Sub S shares to a Roth and then arrange a company sale that would jack up the value of those shares. That would be essentially an end run around the 4K contribution ceiling.

If you can't buy something in the open marketplace - on a major exchange - you can't buy it for a Roth or IRA.