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Can someone tell me if the trading costs associated with buying and selling stocks in an IRA account are paid for from the funds within the account, and if so are they considered a withdrawal from the account subject to income tax and potentially early withdrawal penalty of 10%? Thanks....wisefool2
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Greetings, Wisefool2, and welcome.

<<Can someone tell me if the trading costs associated with buying and selling stocks in an IRA account are paid for from the funds within the account, and if so are they considered a withdrawal from the account subject to income tax and potentially early withdrawal penalty of 10%? >>

Trading costs are paid from monies available within the IRA and they are not considered as a withdrawal. They have no impact on taxes at all.

Regards....Pixy
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< Can someone tell me if the trading costs associated with buying and selling stocks in an IRA account are paid for from the funds within the account,>

Yes, almost always.

< and if so are they considered a withdrawal from the account subject to income tax and potentially early withdrawal penalty of 10%? >

No.
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Can someone tell me if the trading costs associated with buying and selling stocks in an IRA account are paid for from the funds within the account, and if so are they considered a withdrawal from the account subject to income tax and potentially early withdrawal penalty of 10%? Thanks....wisefool2

I've always let the commissions come directly from the funds in the account. I don't report this cost and it has no consequence on my taxes. However, some time ago I asked my broker about this. I was told that I could actually submit additional funds to cover the commissions and then let that show as an expense against that year's income. Seemed like a lot of extra work, so I never did it.
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Kenman,

<<I've always let the commissions come directly from the funds in the account. I don't report this cost and it has no consequence on my taxes. However, some time ago I asked my broker about this. I was told that I could actually submit additional funds to cover the commissions and then let that show as an expense against that year's income. Seemed like a lot of extra work, so I never did it.>>

If done in conjunction with an IRA, it would seem to me the IRS would call that a contribution for the year. You would have to submit Form 8606 with your tax form, etc. Hardly seems worth all the effort what with the accounting that would be involved.

Regards.....Pixy
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<<Hardly seems worth all the effort what with the
accounting that would be involved.>>

Pixy...

Which is exactly why I never did it! However, at the time all this money starts to flow out of the account, all those commissions should be deductible. There's a record keeping nightmare, if I ever saw one.

Kenman
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