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frogdog30: "Hi"


"I have a couple questions. A few notes. I have 25-30 year time horizon before needing these funds. They are in a Rollover IRA (so consist of pre-tax dollar contributions) and strictly for retirement.

1) When buying stocks in a tax-deferred IRA, do short-term and long-term capital gains still come into play?"

Not under the current rules.

"Do I need to keep track of all stocks within this IRA that I hold for shorter than 12 months for the next 25-30 years?"

Not under the current rules; you might, for your purposes and knowing your investment style, still want to track this issue.

"Or is it that when I get to retirement and start taking distributions that all of the money, contributions and gains, is just taxed at my then current income tax rate?"

Yes, under the current rules. Also there will eventually be RMDs under the current rules.

"2) I don't understand the rationale behind the strategy for trading stocks in taxable brokerage accounts vs an IRA. With a 25-30 year time horizon until retirement why does it matter?"

Timing of taxes, changes in tax rates, and difference tax rates between ordinary income and LT capital gains.

"If the money you have is in an IRA and you want the greatest chance for growth shouldn't you be in stocks??"

Assuming that you mean the "most" growth, generally speaking, yes.

"If the money is for retirement what would be the advantage to using a regular brokerage account?"

See above.

"Then you'd have to mess with potentially paying taxes every year. Is it because the answer to #1 is yes, everything gets taxed at my then current income rate, whereas if I had used a regular brokerage account I would theoretically be paying a lower rate of tax on the gains each time I sold?"

Yes. Also, who knows what future tax rates will be.

Hope this helps.

Regards, JAFO
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