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Hi.

I have an IRA with stocks I purchased in May of 1998 I am thinking of selling some of the poor performing stocks that I have lost money with to date (KO, Boeing). If I sell and buy with in an IRA, what are the costs or tax ramifications? Since it is an IRA, can I buy and sell withinout it affecting my taxes?


Thanks.

TLS
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I don't believe there are any tax ramifications from buying and selling in an IRA.
When you withdraw the money from an IRA the amount withdrawn will be taxed at regular income tax rates. There are no Capital gains taxes due from IRAs nor can you deduct for your losses. So, you can trade as often as you wish without accruing capital gains taxes for any gains on your sales.
Hope this helps
Bill
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Yours turns out to me one of the most often asked questions.

As long as the shares are already in the IRA account and the money from selling them stays in the account, the IRS does not get notified and there are no taxes to be paid. Taxes become due only when you withdraw funds from the account. You then pay taxes at the normal rate. You do not get capital gains rates.

So within the account, you may buy and sell at will with no tax implications.
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TLS writes:

I have an IRA with stocks I purchased in May of 1998 I am thinking of selling some of the poor performing stocks that I have lost money with to date (KO, Boeing). If I sell and buy with in an IRA, what are the costs or tax ramifications? Since it is an IRA, can I buy and sell withinout it affecting my taxes?

I reply:

Be careful. If you repurchase the stocks within 30 days of the sale, even within an IRA, there is a serious argument that the wash sale rule will prevent you from claiming the loss. Moreover, since the repurchase is in a tax-deferred account, you might never be able to claim the loss; at least under the usual situations in which the wash sale rule applies, the loss is merely deferred. This subject comes up on the Tax Strategies board about two or three times a month. --Bob
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Bob78164:

<<<<TLS writes:

I have an IRA with stocks I purchased in May of 1998 I am thinking of selling some of the poor performing stocks that I have lost money with to date (KO, Boeing). If I sell and buy with in an IRA, what are the costs or tax ramifications? Since it is an IRA, can I buy and sell withinout it affecting my taxes?>>>

"I [Bob] reply:

Be careful. If you repurchase the stocks within 30 days of the sale, even within an IRA, there is a serious argument that the wash sale rule will prevent you from claiming the loss. Moreover, since the repurchase is in a tax-deferred account, you might never be able to claim the loss; at least under the usual situations in which the wash sale rule applies, the loss is merely deferred. This subject comes up on the Tax Strategies board about two or three times a month. --Bob"


Bob, I think you may have jumped the gun here. The original poster said that he held the stocks in an IRA, when/if he sells them for a loss (within the IRA) he cannot take the loss on his tax return for the year, so there is no loss to "wash" and he/she need not worry about.

The recurring dispute on the Tax board always seems to involve selling for a loss out of a taxable account and then repurchasing inside an IRA (or other tax benefitted account).

Just my $0.02. Regards, JAFO
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JAFO31 writes (in part):

Bob, I think you may have jumped the gun here. The original poster said that he held the stocks in an IRA . . . .

I reply:

Quite correct; I must have been more tired than I realized. Thanks for keeping me on the straight and narrow. --Bob
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