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Author: lobbers Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121317  
Subject: Capital gains Date: 2/9/2012 2:12 PM
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I have a Rollover IRA with E-Trade. I'm actively trading stock within the account, with a definite long-term outlook. My question is: Will I owe capital gains tax on any realized profit when I begin withdrawing at retirement, in addition to fed/state income tax? Thanks!
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Author: TMFPMarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 115009 of 121317
Subject: Re: Capital gains Date: 2/9/2012 2:53 PM
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I have a Rollover IRA with E-Trade. I'm actively trading stock within the account, with a definite long-term outlook. My question is: Will I owe capital gains tax on any realized profit when I begin withdrawing at retirement, in addition to fed/state income tax?

There is no "capital gains" tax in our system. There is a special income tax rate applied to some capital gains, but no separate tax. Taxable distributions from retirement accounts are income taxed as ordinary income. There's no tax need for tracking gains and losses within a retirement account.

Phil
Rule Your Retirement Home Fool

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Author: vkg Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 115010 of 121317
Subject: Re: Capital gains Date: 2/9/2012 4:14 PM
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There's no tax need for tracking gains and losses within a retirement account.

This is true for federal, but isn't there one state that doesn't recognize IRAs and requires tracking?

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Author: irasmilo Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 115013 of 121317
Subject: Re: Capital gains Date: 2/9/2012 7:51 PM
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There's no tax need for tracking gains and losses within a retirement account.

This is true for federal, but isn't there one state that doesn't recognize IRAs and requires tracking?


You may be thinking of NJ which doesn't recognize deductible contributions to traditional IRAs. NJ requires you to track all of your contributions (whether deductible at the federal level or not) if you want to exclude any of your distributions from NJ Gross Income Tax.

There is no need to track security cost basis or gains and losses within IRAs in NJ.

Ira

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Author: vkg Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 115020 of 121317
Subject: Re: Capital gains Date: 2/9/2012 10:10 PM
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You may be thinking of NJ which doesn't recognize deductible contributions to traditional IRAs.

You are right. All I remembered was that one state was not IRA friendly.

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Author: TMFPMarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 115021 of 121317
Subject: Re: Capital gains Date: 2/9/2012 10:16 PM
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All I remembered was that one state was not IRA friendly.

I think PA also doesn't allow IRA deductions. But it taxes no retirement income, including IRA distributions.

Phil
Rule Your Retirement Home Fool

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Author: billjam Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 115022 of 121317
Subject: Re: Capital gains Date: 2/9/2012 10:49 PM
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My IRA contributions ceased being tax deductible in 1987 but as I recall Illinois never allowed deduction either. Good news is now that I'm withdrawing they don't tax the withdrals. Don't tax pensions or social security either.

Contrary to what Forbes recently claimed, Illinois is pretty friendly to most retirees. Over 65 we get some breaks on our real estate taxes too.

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Author: lobbers Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 115081 of 121317
Subject: Re: Capital gains Date: 2/16/2012 4:59 PM
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Very helpful. Thank you very much for your reply!

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