Legal Question in Tax Law in Nevada

ira's and individual stock buying/selling

I'm 50 and thinking of changing jobs

and rolling my 401k into an IRA with

an online broker (TD Ameritrade). I

understand that I'd be able to buy

individual stocks within that IRA. But

excactly how does that work when I

want to sell a given stock and avoid

tax consequences and penalties? Do

the proceeds from the stock sell

(including gains) just sit in a money

market within the IRA account untill

I decide how to reinvest them? Is

there no tax consequence as long as

no withdrawl (ie. distribution) is

taken from the account prior to

retirement age?


Asked on 6/13/09, 5:00 pm

1 Answer from Attorneys
Ronald Cappuccio Ronald J. Cappuccio, J.D., LL.M.(Tax)

Re: ira's and individual stock buying/selling

Online stock accounts are great places for IRAs. Unlike a non-IRA, each purchase and sale is not reported to the IRS. Rather, you only pay tax when you withdraw the money. This is great for people that do some trading so they do not have to worry about holding a stock to get a long term capital gain.

I personally have an online IRA stock account and it has proven to be the best place for stock investments.

I hope this helps!

Ron Cappuccio

www.SaveYourEstate.com

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Answered on 6/13/09, 8:19 pm


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