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Conference 7.286::digital

Title:The Digital way of working
Moderator:QUARK::LIONELON
Created:Fri Feb 14 1986
Last Modified:Fri Jun 06 1997
Last Successful Update:Fri Jun 06 1997
Number of topics:5321
Total number of notes:139771

729.0. "basis?" by WR2FOR::BOUCHARD_KE (Ken Bouchard WRO3-2/T7) Sun Feb 19 1989 16:26

    Question: What does the word "basis" mean when applied to an IRA?
    
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729.1Did you look into BMT::INVESTING?DR::BLINNIf it hurts, why do you do it?Mon Feb 20 1989 00:3614
        Probably the same thing as when applied to other investment
        instruments:  what you've put into it, usually including any
        fees you paid, in addition to the capital you put in.
        
        Thus, your basis in an IRA would be the money you've put in
        over the years, as well as any fees you paid to have the IRA
        transferred from place to place.  You deduct this from the
        total value to determine your capital gain, to oversimplify
        things.  (You do the same thing for stocks, bonds, etc.)
        
        I'm sure you can find an explanation of this somewhere in the
        BMT::INVESTING conference.
        
        Tom
729.2maybe this'll helpREGENT::MERRILLTake that <frown>, turn it upside down ...Tue Feb 21 1989 12:3513
    It seems that an IRA may have two "basis": your deductible basis
    and your non-deductible basis.  All interest earned is tax-deferred:
    when you get it you pay tax on all that you take out. Your
    deductible basis is the same: when you take back that money that
    you did not previously pay taxes on, then you will have to pay taxes
    on all that you take back. The deductible basis is zero.
    
    When you take back non-deductible money, you will have a "basis"
    because you already paid taxes on it (it was not deducted).
    
    	Rick
    	Merrill
    
729.3mistakeWR2FOR::BOUCHARD_KEKen Bouchard WRO3-2/T7Tue Feb 21 1989 17:391
    Oops,meant .0 to go into the investing notes.