On Nov 5, 3:42*pm, "Gary" <ghorne2...[at]yahoo.com> wrote:
- quote -

"Never" may be harsh but I notice that Don didn't offer a specific set
of facts in which, "It is never a good idea to contribute or buy tax
exempt assets in a tax-deferred account," is incorrect.

In theory, if tax exempts were paying more than the pre-tax return on
taxable bonds of the same risk then buying exempts wold be preferred.
If, however, you see that in the relative pricing of taxable and
exempt bonds then someone is miscalculating risk.

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Thanks,

I have about 20% of my assets in Individual Bonds (earning 5.5% + ) at this
point, 20% in CD's (earning 5.5% +) and the rest in Stock & Bond Funds.

I am 40 years old, have about 220k in Rollover IRA.

Gary
"Don Priebe" <priebe[at]iname.com> wrote in message
news:j3hQk.3216$225.3140[at]nwrddc02.gnilink.net...
- quote -

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- quote -

"Never" is a harsh word, especially with the recent anomaly where tax free
munis were paying more that treasuries.
--
Don EA in Upstate NY

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On Nov 4, 11:49�am, "Gary" <ghorne2...[at]yahoo.com> wrote:
- quote -

In both a) and b) you will pay tax on this "exempt" income.


- quote -

Yes. It is never a good idea to contribute or buy tax exempt assets in
a tax-deferred account, as that converts them to TAXABLE assets. To
add insult to injury, you will be taxed as ordinary income, not
capital gains.


- quote -

You need to diversify further, with some equity assets (depending on
your age and nearness to retirement) to take advantage of the
inevitable recovery in the market. 90% in bonds or bond funds is
unlikely to provide the growth you need.

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Being that I would like to maintain a stable (in this market) value of my Rollover IRA, I have 20% of my money in Tax Exempt Bonds. Will I be taxed on this either a) if I convert it to a Roth IRA OR b) When I take money out during retirement.

Was it a bad idea to put these Tax Exempt securities in my Rollover IRA ?

Prior to this, my IRA was 90% Bond Funds, so I only lost about 15% value when the market tanked. I would like to have some stability in this fund. I also have some high paying CD's.

Thanks.....

Gary


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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >