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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Brendan W who wrote (13246)	10/26/2001 12:51:31 PM
From: Paul Senior	Read Replies (3) \| Respond to of 78717

Brendan, tax consequences: I'm no tax expert, and the only tax advice I am implying is to "see your tax advisor" for the wisest approach to holding REITs I look at it this way: Regarding federal taxes: An IRA is a tax-deferrable vehicle. If you control what goes into it, you can put in say, REITs or growth company stocks, or junk bonds or municipal bonds or etc. Those investments grow (tax-free) until you begin to make withdrawals. When withdrawals are made, EVERY dollar that comes out (i.e. that is withdrawn) is subject to tax at the person's then current tax rate. That means the "return of capital" dollars that went in, and, for example, any municipal bond interest dollars that went in that otherwise would be exempt from federal taxes -- these dollars come out subject to tax. (I use 'subject to tax' rather than "they get taxed" because there seem to be many exclusions, off-sets, tax brackets, tax angles, etc. with the federal tax code such that the actual tax dollars (if any) one actually pays might depend on one's particular circumstances at withdrawal times.) We're not talking here about a ROTH IRA, where the point with the ROTH is that nothing (Big?) that comes out of it (is withdrawn) is federally taxable, if ROTH rules are followed. (Again, I'm not competent here. For example, I don't know the relationship between ROTH withdrawal amounts and how that might affect or be affected by any "alternative minimum tax" calculations.) Are these tax considerations not true in general (without having specific tax and situational knowledge)?? Paul S.