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Greetings, Colesull, and welcome. You wrote:

<<Tax Questions. Is it better or cheaper to invest money in stocks through a Roth IRA account from a online broker and withdrawing the gains, therefore paying the penalty and not having to pay the capitol gains tax like you would in a taxable account? Or to invest in a normal taxable account and pay the capitol gains tax. >

A Roth IRA has a heirarchy of withdrawals. The first money out is considered to be your original contributions, and those you may take free of taxes at any time. In your example, you deposit $2K in the Roth and buy stocks. You sell the stocks one year and one day later and make a gain of $1K. You withdraw that $1K, and it's considered part of your original contribution. Thus, that withdrawal will be untaxed. Reinvest the remaining $2K, and one year and one day later sell the stocks for a gain of $1K. Take that $1K, and it's still part of your original $2K contribution, so it is also untaxed. You have now taken all original contributions. Reinvest the remaining $2K (all earnings now), and a year and one day later sell for a gain of $1K. Take that profit, and it will be taxed at ordinary income tax NOT capital gains rates. Further, it will be penalized another 10% as an early withdrawal because you're younger than age 59 1/2.

Which is better for what you wish to accomplish, a taxable account or a Roth? Run the comparative numbers yourself and see.

Regards..Pixy
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