Here is a question I was posed today and I need to defer to the experts because I did not know. Client has a combined income of less than $150,000 from last year and would like to open a Roth IRA prior to April 15th for the year 2008 and they would like to contribute stock of a company they bought into last year. They would also like to make additional contributions to maximize for 2009 as well.

Lets say he owns 5 shares and each share is worth $5000, (his buy in price) and lets say he is more than a 5% owner of the comany now. Lets say they are over 59 1/2 for this example. The value of one share for himself puts him almost at his limit and his wifes as well, the other $2000 ($1000 catch up each) that he could potentially fill his Roth for he and his wife is a portion of another share. You cannot split the next share correct? not without the company that he purchased it from reissuing correct?

The other question I have is how is valuation determined? His cost basis at the time of purchase? If that number is below the $5000 annual contribution limits and below the $1000 if he is over age 59 1/2 can he contribute these shares into this Roth. The next question is who would be able to hold the account for him?

Thanks in advance for your help.

Chris