Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
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!
Print the post Back To Top
No. of Recommendations: 7
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
Print the post Back To Top
No. of Recommendations: 0
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?
Print the post Back To Top
No. of Recommendations: 1
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
Print the post Back To Top
No. of Recommendations: 0
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.
Print the post Back To Top
No. of Recommendations: 1
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
Print the post Back To Top
No. of Recommendations: 0
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.
Print the post Back To Top
No. of Recommendations: 0
Very helpful. Thank you very much for your reply!
Print the post Back To Top
Advertisement