Converting normal brokerage into an IRA

[westcl2]

So I have a normal brokerage account w/ ~20k in stocks.  I want to convert this over to some form of IRA and want advice on which would be better for tax purposes. 

Normal marginal bracket 25%

I recently swapped my stocks over from a personal holding to a vanguard brokerage account (not sure if this alters capital gains timing).  Assuming that it doesn't I've held these stocks for quite a while and they all qualify for capital gains rates.

Right now I have a roth IRA and thinking I can sell off shares and make my annual contribution for the next couple years from this brokerage fund at cap gains rate seems like about of a tax scenario I can imagine.  also by putting the funds in my roth I can contribute to the preferred shares vanguard indexes instead of starting at the higher expense ratio ones (minor but why not?)

But I was curious if there was an argument to just throw it in a traditional IRA

[MDM]

See http://forum.mrmoneymustache.com/investor-alley/deciding-between-roth-and-traditional-ira-based-on-marginal-tax-rate/.  Does that answer your question, or is there something else?

[westcl2]

it kind of covers what I was looking for....most everything in that appeared to me as contributions from income.  I'm looking to see if it's beneficial to sell off a brokerage account to fund a traditional ira

[MDM]

I'm looking to see if it's beneficial to sell off a brokerage account to fund a traditional ira

If you can fund it from W-2 income, you can leave the brokerage money invested and not pay the capital gains tax that would be due if you sell.

Either way there is a $5500 deduction (assuming you qualify).  Funded from income there is no other tax, but funded from stock sale you pay capital gains tax.

[seattlecyclone]

Yeah, it's better to contribute out of your paychecks if you can afford to do that. Otherwise selling stocks to fund an IRA is not a bad idea at all. If you're in the 25% bracket I would suggest a traditional IRA if you qualify to make deductible contributions.