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URL:  http://boards.fool.com/gt-explain-what-is-taxed-on-a-roth-if-over-the-15007508.aspx

Subject:  Re: Capital Gain? Date:  5/21/2001  12:52 AM
Author:  FelineAvenger Number:  29801 of 76237

> Explain what is taxed on a Roth if over the next 20 years
> $2000 (and more if they increase it) is put in each year.
> We wouldn't pay ANY tax on the gains OR the incme even
> upon distribution? Say we take it ALL out? no penny would
> go to the IRS?

That's the beauty of a Roth - you've already paid the tax up front, since contributions to a Roth are not tax-deductible. But when you take your distribution later, the gains are completely tax free. Keep in mind that you do have to keep your money in until you reach a minimum age (59 I believe) and also a minimum of 5 years, if I understand correctly. On the other hand, because the tax is already paid, there is no minimum required distribution at 70 1/2 like there is for a traditional IRA or 401k


FelineAvenger.
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