Investing RMD

[oldradio99]

I am 73 in 2024 so have to start my RMD.

I really don't need the cash right now so was thinking of investing it in the same funds I use for my 401.  Trying to plan a post 401k strategy.

So lets say my RMD is $25,000.  I know that will get taxed ad ordinary income.

If I put that $25,000 into an investment fund, how will that get taxed if I withdraw any cash?  Or are only dividends and/or interest on that fund taxable.

Thanks

[Bsch4477]

Once you invest in a non retirement account only earrings- -interest, dividends and capital gains would be taxed. 

[dmertz · Accepted solution]

In an ordinary investment account, capital investments are subject to capital-gains tax treatment.  Short-term capital gains are taxed as ordinary income and long-term capital gains are taxed at a lower rate than ordinary income.  Capital gains and losses are the difference between the cost basis and the sales proceeds.  Cost basis is tracked either as an average cost basis or per purchase lot depending on your chosen cost basis method.

Certain investments generate dividends and capital gains that are subject to capital gains treatment even if you don't take them out of the account.