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Rolling over 401(k) to IRA...re; equity trading & capital gains in the IRA?


i know you can trade individual equities in an IRA held at a brokerage account, but do you have to pay capital gains tax on your profits each year or are they deffered until distribution?

thanks

All amounts including contributions, capital gains, dividends and interest in a 401(k) and Traditional/Conversion (Rollover) IRA are deferred until withdrawn.

From a roll over into a traditional IRA the money is tax deferred.

regrettably there are no capital gains from a tax standpoint in a traditional IRA. Everything is treated as regular income and taxed as such when the money is withdrawn. The offset is that it is not taxed until withdrawn.

All gains and losses are deferred until you start withdrawing...no tax forms 'til then. Your best bet is to roll into a traditional, but if you have a few years to go, also open a ROTH with the same company....let the traditional ride, and add to the ROTH from here on out.
When you start withdrawing you have a choice of sources....one will be taxed, but the other won't.

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