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Let's say in theory I have a Roth IRA as well as a regular account with a low-cost broker. In both the IRA and the regular account, I have 5 stocks.

Now let's say I don't want one of my stocks anymore, so I sell it, and use the proceeds to buy a different stock or rebalance my portfolio, without withdrawing any money from the account.

Will I be taxed on this, even though I didn't withdraw any money form the account?

Assuming that you made money on the transaction (for the opposite, see my portfolio), the sale in your "regular" account results in a taxable gain.

And, does the same tax rule apply to a Roth IRA?

No. IRAs are tax-exempt entities, and anything that goes on wholely within them results in neither a taxable gain nor loss.

Phil Marti
VITA Volunteer
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