Exchanging within a SEP account

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effillus
Posts: 222
Joined: Thu Oct 04, 2007 2:12 pm

Exchanging within a SEP account

Post by effillus » Sat Mar 03, 2012 9:49 pm

If a person has American Funds mutual funds in a SEP IRA and wants to exchange from equity to fixed inome mutual funds, still with American Funds, would this be a taxable event that would trigger a penalty? Also, would you have to pay a load for an exchange?

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damjam
Posts: 942
Joined: Thu Mar 25, 2010 7:46 am

Re: Exchanging within a SEP account

Post by damjam » Sat Mar 03, 2012 9:55 pm

effillus wrote:If a person has American Funds mutual funds in a SEP IRA and wants to exchange from equity to fixed inome mutual funds, still with American Funds, would this be a taxable event that would trigger a penalty? Also, would you have to pay a load for an exchange?
It would not be a taxable event as long as the funds remain inside the SEP IRA.
You would pay a load any purchase when the fund you purchase has a load, look at the prospectus. At one time I held an American Fund and it had a purchase load.
Is your SEP IRA at American Funds or some other custodian? Why are you limited to American Funds?

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