If you are 60 years old, do you have to pay a penalty if you take cash in some of your stocks

[Critter]

No one at any age pays a penalty for taking cash out of a regular broker's account ... however if you mean an IRA distribution then no, once you are 59.5 you are exempt from the 10% penalty ... it is fully taxable though.

[d_r_bridgers]

So if you cash in stock from your retirement stocks, you don't have to pay a penalty? If you are 60 years old

[Critter]

Yes, IRA distributions taken after 59.5 are exempt from the penalty.

(the fact that you liquidated holdings "sold stock" has nothing to do with the fact that you took an account distribution)

[d_r_bridgers]

If you pay tax when you cash in the stock, will it be taxed again?

[xmasbaby0]

If you get a distribution from an IRA then you will get a 1099R next January that you will need to enter on your tax return.

[d_r_bridgers]

They took out taxes when I cashed some stock in, so I will have to pay taxes on it again?

[macuser_22]

What type account was the stock held in?   A regular brokerage account?  A Traditional IRA?  A Roth IRA?  Something else?

What is or is not taxable depends on the type of account that the stock was held in.

If in a  Traditional IRA then you do not pay anything on the sale of an asset withing the IRA, you pay tax on the cash distribution that you take from the IRA.   The distribution will add to your taxable income, any tax withheld will be applied to offset your overall tax liability.

[d_r_bridgers]

Ok I think I got it now. I just know in the past if we took a withdraw from the retirement, we had to pay a penalty.

[d_r_bridgers]

But now I understand if you are 60, you don't have to pay the penalty.

[macuser_22]

If you are over age 59 1/2 there is no early distribution penalty for a retirement account.

[macuser_22]

Your 1099-R that reports the distribution that you should receive in January should have a code "7" in box 7 if a Traditional IRA or a code "Q" if a Roth IRA that would indicate that you were over age 59 1/2.

[d_r_bridgers]

Thank you

[Critter]

You didn't "pay taxes" on the distribution ... you had taxes withheld to cover the expected taxes on the tax return when it is filed ... just like you had taxes withheld from your paycheck when you worked.

So just like the W-2 you entered on the return showing the income & withholding you will also enter the 1099-R showing the distribution & withholding... it is the same concept.  You are NOT taxed twice.