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To: SteveH

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.


7 posted on 12/07/2020 8:58:20 AM PST by kjam22 ( )
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To: kjam22
There is no tax when you sell inside this IRA but every dollar you take out is taxed as regular income.

True if the rollover contains all pre-tax (401K) or deductible contributions. Not true as a blanket statement for all traditional IRAs. If you have a basis in a traditional IRA (contributions that you didn't get a deduction for) the basis will proportionally reduce the amount of dollars taxed on withdrawal.

22 posted on 12/07/2020 9:19:35 AM PST by damper99
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To: kjam22

My Summary:

You can cash out of the S&P Spyder fund and just leave it in that IRA Account, or roll to another trustee. Then no tax. But if you take possession of the money without a quick roll to a new account, you get taxed. So, thinking there will be a Biden crash, you park the money in a money market fund, or a different investment type.

As to Biden Taxes: If he gets in even after all the fraud, then tax rates will go up. Long term you are stuck. But for a year or two you can accelerate future income into 2020 for future spending. We are going to do that. I had not planned on this and I wanted not to take all of the Mandatory Withdrawal, but doing so under Trump rates is likely better. Keep in mind...the new rates will backdate to Jan 1, 2021. But you have to pay attention to the IRS marginal rate levels. The ideal is to get money twice at the lower bracket in 2 years, rather than one big distribution now in 2020, pushing you way up the brackets.

I am a retired Wall Street consultant, investment inventor, and finance prof. Owning an ETF has been shown to be an excellent stock strategy. I have a mix of both. I multipied my money 30 x in ITW, and likely the same amount staying in the Fidelity S&P 500 fund for three decades.


26 posted on 12/07/2020 9:28:08 AM PST by Kebbe (Bruce K)
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