Today TaxMama hears from Mike in the Tax Quips Forum, who is unclear on the concept. “My 7 month certificate of deposit (in an IRA) will expire in November 2011. I used this money as a tax deduction for 2010. If I re-invest in another 7 month CD, at the same bank, can I use this as a new tax deduction for a 2011 IRA? If not, what are my alternatives?”
Paul already explained that to you in great detail.
It’s the SAME IRA account. The CD is an investment inside that IRA.
You don’t get a deduction each time it expires. It’s the same money.
What are your options?
Make another IRA contribution for this year.
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2 thoughts on “Double-Dip IRA”
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As Eva explained, it is the same investment you are turning over inside the original IRA account. It is similar to buying a stock in an IRA account, selling it and buying another stock, bond, or CD. Now if only you could claim the deduction over and over and get away with it you should be given a Nobel Prize in Tax deduction because that would be equivalent to inventing the perpetual motion machine with a little kick and no further input of energy. Take it easy pal!