I just read that this year most mutual funds will be having very large distributions. If my mutual funds are all in my IRA how will this effect me?
2007-10-29 13:19:33 · 6 answers · asked by prozac452 2 in Business & Finance ➔ Taxes ➔ United States
Dividends reinvested in a mutual fund Traditional IRA Account are not taxable when they are paid. You are taxed when you liquidate shares from your account. When you do liquidate shares, you will receive a 1099-R indicating the redemption amount, which is reported to the IRS.
So, if your mutual fund pays a dividend that is reinvested into your account, there will be no tax consequences unless you redeem all or part of your shares.
2007-10-29 13:40:33 · answer #1 · answered by jwh 1 · 0⤊ 1⤋
uvtstudents is wrong. IRA is also Individual Retirement Account, which is what was meant in the question, not IRS.
It has no effect because a distribution from a mutual fund in an IRA is not taxed until you take the money from the IRA.
2007-10-29 20:41:30 · answer #2 · answered by StephenWeinstein 7 · 0⤊ 0⤋
It won't, except that your IRA balance will be higher. It will have no tax implications. When you withdraw the money, if it's a traditional IRA you'll pay tax on the withdrawals.
2007-10-29 22:53:43 · answer #3 · answered by Judy 7 · 0⤊ 1⤋
If the income stays in your IRA, it is not taxable. When you withdraw money from IRA, it is taxable income.
2007-10-30 02:24:30 · answer #4 · answered by MukatA 6 · 0⤊ 1⤋
It will not affect you at all. Distributions within retirement accounts are not taxable.
2007-10-29 20:23:55 · answer #5 · answered by Anonymous · 0⤊ 2⤋
u probably mean IRS, not IRA (irish republic army)
2007-10-29 20:27:01 · answer #6 · answered by uvtstudents 2 · 0⤊ 2⤋