If I sold some bonds within my 401k and immediatel...
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New Member

If I sold some bonds within my 401k and immediately purchased new bonds within that 401k, does that qualify as taxable income?

 
2 Replies
Level 14

If I sold some bonds within my 401k and immediately purchased new bonds within that 401k, does that qualify as taxable income?

Transactions within a retirement plan are not taxed. 

Level 15

If I sold some bonds within my 401k and immediately purchased new bonds within that 401k, does that qualify as taxable income?

No.  You don't report transactions inside a 401K or IRA.  Only withdrawals and rollovers to another account like to an IRA.  All the gains or losses stay inside the account.  That's  one of the benefits of having a 401K or IRA.  They can grow a lot and you only report it when you take a distribution.  But then it is taxed as ordinary income and not at capital gains rates.

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