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Think of a standard IRA account as an envelope of protection. You put in untaxed dollars, then you can direct that things be bought and sold within the envelope without tax consequences. But, if you remove something from the envelope, it is called a distribution and you will be taxed on the whole amount of the distribution as ordinary income. The newer ROTH IRAs are different; for these, you put in already taxed dollars, you buy and sell merrily without tax consequences, and you can take distributions without paying taxes.
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