Capital Gains Tax on IRA gains?

Question

I just earned a few hundred dollars on day trading in my IRA account. I know its risky, but the question is: do I have to pay capital gains tax an any gains I make in my IRA account. I have a ROTH IRA.

Answer 1

I read the answers and saw that some people said yes, others said no. And both are kind of true. The way it works is this...
You put 3k in - it grows to 4k - you can take 3k out with no tax or penalties anytime because you've already been taxed on that money. Take out 4k and you'll pay tax on the 1k, plus penalties if you take it before 59 1/2. But you pay no taxes on the gains until you start pulling money from the account.

Answer 2

If you leave the original money in a Roth IRA for five years the gain will be tax free after you reach 59 1/2! There are some exceptions to the 59 1/2 thing but that is not your issue!

Answer 3

You should not have to pay any taxes on a Roth IRA. As long as it is set up as a Roth IRA you only pay taxes on the money you originally invest. After that intial investment you do not pay a dime in taxes. You will have to pay penalties if you draw the money out too early however.

More people need to take advantage of Roth IRAs and their remarkable benefits. Way to go!

Answer 4

There's no capital gains tax ever - you're putting in after tax contributions, and the account grows free of taxation. Distributions also come out tax free as long as you're at least 59 1/2 year old.

Answer 5

No, unlike traditional IRA's, Roth IRA's are not subject to any tax. That is the advantage of them.

Answer 6

Not on a Roth. You already paid tax on that money going in.

Answer 7

Not until you start cashing out when you reach the retirement age. The beauty of retirement accounts are, you don't pay tax on gains until you take the money out....