IRA Tax Question?

Question

If I am buying and selling mutual funds and stocks within my traditional IRA are the gains taxable now or are they not taxed until I begin to make withdrawals from the account?

Answer 1

Nothing is taxed in your IRA...it can double, triple or increase ten times over... no paperwork, no tax forms. Upon withdrawal, however, you have to designate a portion of each withdrawal to be withheld for income tax purposes... 20% is a " safe" percentage...and you may even be entitled to a refund ( if you overpay)

That's why a ROTH is such a nice idea... pay a little in taxes now...but, those huge windfalls down the road are yours and yours only!!

Answer 2

As long as the transaction is within the IRA, there is no capital gain (or loss) impact.  When you take distributions, those are taxed as ordinary income.