Why do Ihave to pay 20 percent taxes on money I did not take out from investments

[VolvoGirl]

Please explain more.   What form did you get?  Like a 1099R?  Or a 1099B?  If you didn't take any out what did you do with it?

[butterflycowgirl]

I got 1099 Div. It is from capital gains that were reinvested but not taken out. Now I've lost money on my retirement so it doesn't seem right to be taxed on money I never took out and now lost

[VolvoGirl]

Sorry you have to report it and pay tax on it.  But capital gains are taxed at a lower rate.  

You say "retirement"?  You don't get a 1099Div for retirement accounts and don't report gains or losses in retirement accounts.  You only report distributions.   Retirement accounts are 401K and IRA accounts.

[Mike9241]

if the security was held by a tax-deferred retirement a/c like a 401k or IRA (there are others) you should not have gotten a 1099-Div. 

if it is your SSN and name that's on the 1099 but the security is held in a tax-deferred a/c, then something is messed up. you would need to contact the company holding the a/c.   

if it was not held in a tax-deferred a/c then:

in effect, the tax laws treat it as if you got the cash and then used the cash to buy more of the same security so it is taxable.    the fact that the security declined in value is irrelevant. you would need to sell it to take the loss. however, the deduction for net capital losses can't exceed $3,000 per year.