Hi Steve,

Welcome to Motley Fool and welcome to the board.

When you are in Foolish Four stocks, usually in a self directed IRA, any dividends paid get paid into the account. In my experience, they do not automatically get invested in Foolish Four (unless you somehow arrange this with your broker). Instead they are automatically invested in money markets within the account until you give instructions to invest them.

Because they are in the account, no they cannot be paid to you without incurring a penalty.

If you need a little extra from your IRA, the best way is to set up an SEPP withdrawal program. The payments are based on your life expectancy. You will probably need the assistance of a financial planner to set it up in a way that makes the IRS happy, but if you do it this way, you pay no penalties. Of course the funds that come out of the IRA get taxed as income.

None of the taxes paid on 401K or IRA account distributions take into consideration capital gains. So the year and a day is irrelevant. You will pay ordinary income tax rates (in addition to any penalities).