Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Microcap & Penny Stocks : Green Oasis Environmental, Inc. (GRNO) -- Ignore unavailable to you. Want to Upgrade?

To: Charles A. King who wrote (8957)	3/18/1998 3:55:00 PM
From: Charles A. King	Respond to of 13091

Directors of the NASDAQ and the AMEX are close to an agreement. Analysts say a merger would give a strong lift to Amex's lagging equities business, allow the NASD access to the lucrative options business and lend some credibility to the Nasdaq. The market has had an image problem after a 1996 investigation of whether brokers were bilking investors by keeping wide "spreads" between the prices at which they bought and sold stocks. nando.net Charles

To: Charles A. King who wrote (8957)	3/18/1998 4:07:00 PM
From: John Hensley	Respond to of 13091

Hi Charles- You need to first calculate the basis of the traditional IRA. I've been assuming the traditional IRA mentioned so far has been nondeductible, where you cannot deduct the contribution because you're participating in a qualified retirement plan. In this case, the basis is the total amount contributed and the taxable part is the "gain" on the investment. If the stock goes to zero, you don't have a gain. If the contributions are from a deductible IRA, both the contributions and income are taxable. I should have made that clear earlier.

To: Charles A. King who wrote (8957)	3/18/1998 4:16:00 PM
From: Norman H. Hostetler	Read Replies (1) \| Respond to of 13091

Eli, Charles, et. al.--on advice of various experts I pulled GRNO out of an IRA (and I'm not even 59.5 yet). You do an in-kind transfer to a Roth or whatever. I'll try to summarize. WARNING! I'M NOT A PROFESSIONAL AND CANNOT GUARANTEE THE ACCURACY OF THE FOLLOWING TAX EXPLANATION. SEEK EXPERT ADVICE BEFORE ACTING! Though, as my experts told me, there's no established history regarding transfers to Roth IRAs, and nobody's entirely sure of how the IRS will interpret certain areas. Taxes: 1) 10% premature distribution penalty for the underaged, like me. 2) Income taxes: these depend upon a) the ratio of deductible/non-deductible contributions to your IRA and b) the ratio of the value of your IRA on the date of withdrawal to your contributions and c) the ratio of the value of your GRNO stock on the date of withdrawal to your IRA as a whole. You are withdrawing from your IRA the percentage represented by (c). That percentage must be multiplied by (b) to determine the ratio of contributions to profits represented by that withdrawal. Income taxes will be paid on the profits portion. In addition, income taxes will be paid on the portion represented by the return of deductible contributions (a). You are not entitled to allocate all your IRA profits to other investments and your losses to GRNO; from the IRS perspective, you did not put individual stocks in your IRA, you put undifferentiated cash in your IRA and you therefore value the IRA as a whole in determining the investment results provided by that cash (think of the IRA as if it were a mutual fund in this regard). The smaller the proportion of GRNO (@ 50 cents/share) to the rest of the assets in the particular IRA, the smaller (c) will be and the smaller the current tax consequences, etc. In my case, the collapse of GRNO temporarily pulled my entirely non-deductible IRA in which it resided under water, so that the value of the amount withdrawn (c) was actually less than the proportionate value of the original non-deductible contributions (a). So I owe no income taxes, except the 10% early distribution penalty, which effectively adds 5 cents per share to the 50 cent cost basis. =+=+=Norm