Rotha IRA for 1999 capital gains

[Guest barbra]

Hi,

I was planning on starting a ROTH IRA for capital gains on a mutual fund for 1999. Is it too late to start a Roth IRA for 1999. I have already claimed the capital gains on my income tax and wanted to get the IRA set up for last year's cap. gains. Thanks for your help in advance. Great board!

Barbra

[John G]

Your question is hard to understand. This is my best attempt to answer your Q.

Any capital gains you have from an existing mutual fund are a taxable event for you in the year in which they occur. You can't get those capital gains to go away by opening a Roth IRA. You can't switch some asset with imbedded capital gains into a Roth. Anything that happened in 1999 is "history" and you can't shift it around.

If you meet the income qualifications, you may open a Roth IRA this year. The maximum you can deposit for this year is $2,000. Early next year you can make a deposit for the year 2001. (Wash DC is swirling with various proposals to increase the Roth maximum amount) Your spouse may also qualify for the same amount in a separate account. If you open the Roth with a mutual fund family or with many brokerages that have mutual fund connections, you can put the Roth assets to work in a fund. Within a Roth, you do not have to think about short or long term gains or dividends, since the fund grows and will be eventually dispersed tax free.

If this does not answer your question, add a clarifying post.

[Guest barbra]

Hi John,

Thanks for replying to my query. I just wanted to know if I can make contributions to a Roth IRA for 1999? Has the deadline passed already? Based on your reply, I'm guessing that I had 'til April 15th to make the 1999 contributions. Am I right? Thanks again for replying.

[Guest barbra]

John,

I reread your reply and it answered my question. What I get from it is that I missed the deadline for 1999. I can open an IRA for 2000 and that is what I will do. Thanks again.