@DD660 wrote:
Thx for the info. So, long term is 12 months of greater? Any idea of the rate difference for long versus short?
If your regular income plus your capital gains puts you in anywhere in the zero-24% tax bracket, the long term gains are taxed at 15%. If your regular income plus capital gains puts you in the 32% or higher tax bracket, long term capital gains are taxed at 20%. (Plus 3.9% net investment tax in some cases.)
The bottom line is that long term capital gains are always taxed less than ordinary income, and withdrawals from a traditional IRA are taxed as ordinary income. For the IRA, you got a tax deduction originally, so you were able to invest more money, and it grew tax-free, so you pay tax on everything when you withdraw it. But the other investments were made with after-tax dollars and you likely paid tax on dividends as you went along, so now only your gains are taxed. When you are investing before retirement, you want to think about what mix of traditional IRA, Roth IRA, and regular investments you want. But now that you are retired, withdrawing investment funds will be lower tax that withdrawing from an IRA.
