A black spy or a white spy?
Unless it is a Roth Ira everything you take out of it is taxed at your normal tax rate.
If you wait, the Biden Administration will relive you of all that worry............
Now might be a good time to sell your stocks that are certain losers.
The losses might offset part of your gains?
If it is inside an IRA, there is no capital gain. All taxes are deferred for qualified funds (IRAs, SEPs, 401(k)s, etc). You are taxed when distributed at your ordinary rate.
Gwjack
If you want capital, don’t you have to use capitals?
Rules on IRA’s. Roth Ira’s are funded with after tax funds and there is no tax on the appreciation. Regular Ira’s are funded with pre tax dollars. There is no tax when you sell inside this IRA but every dollar you take out is taxed as regular income. If you have it in a brokerage account and not an IRA as you stated, then long term, short term, cap gains come into play.
If this fund is in a tax-deferred IRA, short-term or long-term doesn’t matter with regards to taxes. Whatever you take out of a tax-deferred IRA is taxed at your normal income takes, not at a capital gains tax rate.
There’s a lot of details left unclear in your question, but based on what I think I understand, the answer is that there is no capital gains tax OR income tax due on assets in the account, UNTIL you actually take the distribution.
At that point, the assets distributed out of the account are taxed at your ordinary marginal tax rate, which - if not working - is probably pretty low.
As long as the assets are held in the IRA though, the distinction between short term and long term cap gains is meaningless.
A black spy or a white spy?
If the asset is held inside of a traditional IRA, there are not current year taxes on gains inside the account.
Taxes only come into play, when you take distributions from the account, which [I believe] are taxable as ordinary income.
Proceeds - Cost = Capital Gain
Now, the rate you get taxed is depends on the length of time you held the asset. If you held for more than a year, it is a long term gain; less than a year, its short term—taxed at your income tax rate.
It is simple if you did it in two transactions; a buy and a sale. If you did multiple buys you need to apply the gains to each portion.
Quicken or any tax program will allow you to enter to transactions and it will spit out a Schedule D report and tell you the taxable amount.
But yeah...your general supposition is correct.
Ok, this is why most people make very bad investment advisors for their own money...
Well if you are to believe the Biden plan they are going after Retirement 401k’s and other retirements like crazy....better to pull it now than let them have it.
You wont pay any taxes when selling anything in the account but the total distribution taken each year will be taxed as ordinary income.
It sounds like you’re confused on several points.
As ‘gwjack’ has pointed out, as long as all the trades you’re talking about are done within your IRA account, there are no capital gains taxes due on your sales, regardless of when you purchased your SPY shares. Short-term holding, long-term holding, performance of the shares over the past 5-months, etc. You don’t pay taxes so long as all of the trades and monies are made and settled within the IRA.
Now, if you decide to take a distribution from your IRA, then you will potentially be liable for taxes on the distribution amount. If it is a standard IRA - where your initial and ongoing contributions were done with pre-tax dollars (where you took a tax-deduction at the time the contribution was made) - then any money you take out will be taxed at ordinary income rates at the time of the withdrawal.
If you instead have a Roth IRA - which would have been funded with post-tax dollars (i.e. - no tax-deduction on the contributed amounts at the time you transferred into the Roth) - then you do not owe any taxes on your withdrawn amounts at all. The only caveat to this I’m aware of is that there’s a “5-year rule”. If I’m recalling correctly, you can’t withdraw contributed funds unless they’ve been in the Roth IRA for 5 years or more.