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Posted by A.G. Kalman on December 2, 2006, 8:22 pm
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Jeff Wisnia wrote:
> Will the IRS accept as a valid IRA "contribution" my
> purchasing a State of Israel bond in my name from their
> agent (Bank of America) and then transfering that bond to my
> IRA, held by a brokerage firm?
>
> I'm asking because I had such a bond in my IRA brokerage
> account and it matured last month. I asked my broker to use
> the proceeds to purchase another $4,500 State of Israel Bond
> for that account. He came back sheepishly apologetic and
> told me that he could, but his firm insisted on charging me
> a $150 fee for handling the purchase. That struck us both as
> a bit chintzy.
>
> The brokerage firm makes no charge for transfers into an IRA
> account. I was planning on making a cash contribution of
> $4500 to the IRA this year, and that got me thinking about
> accomplishing my mission and avoiding that $150 fee by
> purchasing the bond myself (No fee required for that.) and
> transfering it into my IRA account as my contribution for
> this year contribution.
Your annual contribution to an IRA must be in cash.
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