With more and more people investing in stocks in their individual retirement accounts, I'm getting the following question -- Do the commissions and other fees I pay to purchase individual stocks within an IRA constitute a withdrawal from my IRA for tax purposes?

The answer, fortunately, is NO.

Traditionally, people purchased mutual funds for their IRAs. No-load mutual funds have no purchase fees, so there was no confusion over whether a selling fee constitutes a withdrawal, as there might be with purchasing individual stocks for an IRA.

However, all mutual funds charge annual management fees, which come out of the IRA's assets. However, these fees are not considered withdrawals from an IRA. Likewise, annual IRA administrative fees or commissions that are paid to buy and sell stocks within an IRA are not considered withdrawals for tax purposes. Therefore, you will not incur taxes and penalties on the amount of fees.

Of course, these fees do reduce the amount of money you have in your IRA, so you should be careful not to pay too much in fees, whether you're buying individual stocks or mutual funds.

Nevertheless, such fees are not considered withdrawals for tax purposes. So relax and get investing in that IRA.

You can now invest in IRAs, including the Roth and Education IRAs, via BUYandHOLD. For further information about BUYandHOLD's IRA programs, check out the Web site or call (800) 646-8212.

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