Using the Average Basis Method

This page explains the average basis method for mutual fund shares. You may want to know this so you can perform these calculations in a situation where figures provided by your mutual fund company are not accurate, or simply to have a general understanding of how this method works. Typically this method is easier to use than the separate lot … Continue reading “Using the Average Basis Method”

Capital Gain FAQs

Q: My stocks went up but I didn’t sell yet. How much gain should I report? A: None! As a general rule you don’t report capital gain or loss until you sell. There are exceptions, such as when you receive capital gain distributions from a mutual fund. Q: Does a capital gain increase my income? … Continue reading “Capital Gain FAQs”

Conversion Consequences

Unlike rollovers, a conversion from a traditional IRA to a Roth IRA is taxable. Amount taxable If all of your contributions to all of your traditional IRAs have been deductible, then the full amount of your rollover is taxable. Q: Can I report part of this amount as capital gain? A: No, it’s all ordinary … Continue reading “Conversion Consequences”

How to Start a Roth IRA

Starting a Roth IRA isn’t difficult. Any number of providers are more than happy to make this process easy for you. This page covers both the thought process you should go through and the practical steps you need to take. Outline To start a Roth IRA you need to take the following steps: Confirm that … Continue reading “How to Start a Roth IRA”

Roth IRA Rules of Thumb

There are plenty of details on choosing between a traditional account and a Roth account elsewhere in this guide. This page is for those of you who don’t want to plow through lots of analysis — or who want a quick way to check whether you came to the right conclusion. These rules of thumb … Continue reading “Roth IRA Rules of Thumb”