Question: If I have a ROTH IRA and decide to sell an ETF that is just not performing and immediately take that money (after the 3 day hold) and put it into one I like better at that time, am I taxed?

I have a question: If I have a ROTH IRA and decide to sell an ETF that is just not performing and immediately take that money (after the 3 day hold) and put it into one I like better at that time, am I taxed??? Is there a cap on these transactions without a tax? Basically, I am trying to avoid paying the man on post tax dollar investments like ROTH IRAs. This should be fun…

Wade Yandell: Shouldn’t matter if you use the proceeds next day or next year. You’ve already paid taxes on the money going in.

Brent Meadors: Anything traded inside ROTH IRA Does not have to be reported.Meaning : (Capital Gains/Dividends) are not taxed until you withdraw the capital appreciation.You can withdraw your original deposited amount because it has already been taxed.Once you do withdraw from the gains/dividends prior to 59 1/2 your hit with a 10% penalty + taxed at short or long term.

JC Catalano: So if you only take out the amount invested (not what may have been gained), you’re good? What if it was a loss ETF? Is that a tax deduction? Separate question…

Chris Gabel: No tax deduction as well as no taxable income on transactions within the Roth IRA, which is non-taxable trust (I’m a CPA)

Brian Campion: Google it …..

JC Catalano: You’re always one click away from BBC! 🙂

David Linnell: You can buy and sell anytime in your Roth. You are not taxed on anything as long as it stays in the Roth, you can take your principal out at anytime. But, then again any losses cannot be claimed as loses either.

JC Catalano: Ahhhh…well that sucketh!

David Linnell: Not really, you should have more gains than losses.

JC Catalano: David, not every ETF is a winner. The idea is to have more gains, hence the moves when necessary and premise of the question.

David Linnell: yes but that is the risk. you should have many more winners that you win tax free? Hopefully.

JC Catalano: I move to new sectors nearly annually. Not a risk as far as I am concerned. But doing so with individual equities implies taxation. The ROTH IRA is a different animal that I am not as versed on yet.

David Linnell: Well, nothing beats it. You lost me with this statement. There is no taxation in your Roth. You can trade individual equities as well as ETFs. If there is no risk you should not have losses to worry about?

Hugh McMillan: You can trade or hold cash inside your ROTH anytime all the time until you are 701/2 then mandatory distribution kicks in. See IRA rules. If you withdraw before 591/2 and do not meet one of the few exceptions you must pay a penalty of $1000.

JC Catalano: Hugh McMillan That sounds bad…

JC Catalano: David Linnell Well, I come from the trading world of equities. ROTH IRA is an old rollover 401k from a business I worked at for years and left. I took that money and started ROTH IRA but never really got out of anything I had. I now want out of a few o…See more

David Linnell: When you converted it to a Roth those losses were basically figured in the total tax amount. So in a way you did get to capture the losses. You did pay taxes when you converted from a 401k to a traditional IRA to a Roth?

Hugh McMillan: JC Catalano You should see the penalties for failing to take mandatory distribution from regular 401Ks and IRAs.

David Linnell: I don’t think he is in the mandatory distribution category.

Joe Mahilum Friday: there are securities transactions that are taxable even in an IRA of any type. best to ask your broker or a CPA

Sue Weed: You have to watch MLP distributions in retirement accoiunts.

Joe Mahilum Friday: Sue Weed and ETFs that hold MLPs

JC Catalano: This I knew…

Sue Weed: Joe Mahilum Friday there are a few exemptions to ETFs holding MLPs in retirement accounts AMLP, NTG, AMJ ,… https://seekingalpha.com/…/136742-should-you-hold-mlps…

Should you hold MLPs in IRAs or 401(k)s? – The MLP Investor
seekingalpha.com

JC Catalano: Sue Weed I have none of these….

John Marshall: MLPs are tricky in retirement accounts once you exceed a certain amount of income. I always stress a little over trying to figure these out because the K-1’s are a damn mystery.

Sue Weed: John Marshall The ones in the link don’t do K1s so not subject to UBTI problems.

Dawn DuBose: No tax on Roth IRA. Only penalty if you withdraw prior to having for 5yrs.

JC Catalano: Withdraw is not the same as sell and reinvest, correct?

Dawn DuBose: Nope

JC Catalano: Dawn DuBoseBingo. Simple and clear…I like you!

Dawn DuBose: Np JC .

Carl Horn: If the ETF is ‘inside’ the Roth then don’t worry, if the ETF is outside in a taxable account and you are making a contributions of the realized profit no luck.

Joe Mahilum Friday: love those EFTs! wait…what’s an EFT ?

Joe Mahilum Friday: I remember now … Electronic Funds Transfer

AJ Singh: My fav. to trade within. Even better if you have a 403b Roth as the max contribution is $18k and going up in ‘18 plus you get another $6500 per person in individual ROTHs, so spouse and me an additional $13,000 😊NO TAXES NO CAPITAL GAINS😉 as long as you’ve had them for 5 plus years and don’t touch them till 59 1/2 you’re sitting pretty. https://www.forbes.com/…/dividend-investing-in-a-roth-ira/

Dividend Investing In A Roth IRA
forbes.com

Sue Weed: Almost enough to make me wish I wasn’t retired from teaching already.

AJ Singh: Sue Weed seriously😊 My spouse is a speech pathologist at our local school district and we max out on all ROTHs for sure. Isn’t it ironic that they give these to educators that they don’t make too much to begin with.

AJ Singh: But you’re right with that word “almost.”😊

Sue Weed: AJ Singh I retired about 10 years ago after 36 years in Detroit Public Schools. I stopped contributing to 403Bs in the mid 80s because Detroit only let certain insurance companies offer them and they only had fixed rates 4%. I was told after 7 years …See more

Sue Weed: AJ Singh If I went back into teaching in these days I would wear a body cam the entire time.

AJ Singh: Sue Weed lol😊 That is true. Oh that is so wrong what they did. Was it because it was a Detroit with all the financial troubles it had seen? Luckily we have retired teacher friends from the same district that keep us in the loop with everything as they are so on top of their retirement pensions etc. I can’t wait to tell them what Detroit did. That’s just not right.

Sue Weed: AJ Singh that was DPS of old I don’t know if it is any different I just know they have hundreds of teaching vacancies.

AJ Singh: Sue Weed Same problem here with too many vacancies. The problem here is San Jose Ca is teacher are not paid enough to live in Silicon Valley.

Sue Weed: AJ Singh I retired at master max 10 years ago and teaching contracts since then have given all the gains back. Current masters max are back to 1999 levels and they don’t get a pension instead self directed retirement with no match and the medical insurance requires teacher pay 10% of the policy premiums. Add in “Common Core” and it is the recipe of doom for public education.

AJ Singh: It is frustrating why our country does not value teachers. I am surrounded by folks in education and every time I ask why you do this,”the answer is always, “I love what I do.” My grandparents owned a school in India my aunts and uncles are teachers, m…See more

Sue Weed: AJ Singh the same can be said about our police and firemen. Sadly too many young teachers are calling it quits from the field for all the reasons you mentioned plus the lack of administrative support and mandated “teach for the tests” curricula has stifled the creativity and joy that kept people in the field.

AJ Singh: Sue Weed oh yes don’t get me started on the other Estrade of support😒

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