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From: halle@hou2b.UUCP (J.HALLE)
Newsgroups: net.invest
Subject: Re: putting your IRA in tax free investments
Message-ID: <632@hou2b.UUCP>
Date: Fri, 18-Oct-85 16:43:35 EDT
Article-I.D.: hou2b.632
Posted: Fri Oct 18 16:43:35 1985
Date-Received: Sat, 19-Oct-85 08:13:20 EDT
References: <1423@hound.UUCP>
Organization: AT&T Bell Labs, Holmdel NJ
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All withdrawals from an IRA are treated as ordinary income, regardless
of how the money got there and how it was earned.  Even tax-free income.
The regulations are very explicit and very clear on this point.  Long
term capital gains are also treated as ordinary income, so the 60%
forgiveness is lost.  Thus vehicles producing capital gains might be
inappropriate for an IRA.  (I say might because if the gains are large
enough, the deferral could make up for the loss of forgiveness.  Each
situation must be analyzed separately.)  Since tax-free investments
produce less than taxable ones, they are always wrong for an IRA.