²⁵ See Sec. 3405(c) and Regs. Sec. 35.3405-1.

²⁶ See Sec. 402(c)(1)(C).

²⁷ See Sec. 408(d)(8). This treatment, however, may not be available in all cases at the state level.

²⁸ See Sec. 408(d)(8)(B)(ii).

²⁹ The tax-deferral opportunities exist not only for the account owner, but also for spousal beneficiaries and, for distributions after 2006, nonspousal beneficiaries; see Sec. 402(c)(11)(A).

³⁰ The gain subject to tax may be further ameliorated in the event the taxpayer has incurred capital losses. Capital losses can offset capital gains, reducing the tax liability on the disposition of taxable accounts.

³¹ However, if the IRA owner desires to leave an inheritance to his or her beneficiaries, consuming the Roth IRA assets first and passing the traditional IRA to heirs may be preferred if the beneficiaries are in a lower income tax bracket than the taxpayer.

³² However, an investment in “collectibles” is treated as a distribution under Sec. 408(m).