Hi avs129,
Just to be clear, capital gains taxes are not assessed on the distribution of retirement funds.
But, your personal income situation could subject you to Federal Income Tax on a possible retirement distribution, regardless of whether you are under or over 59 1/2. That age impacts the basis for prematurely taking funds out of a retirment account under the age of 59 1/2 and being subject to a 10% penalty. Federal income tax could still be imposed on that distribution on your year-end tax return, as long as those funds were not transferred to another financial institution within 60 days of withhdrawal.
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