Advice on how to liquidate stock accounts?

NYMomof2
Sun, 02 Aug 2015 03:41:21 +0000

NJres, if you have several IRAs, you can take the total RMD from one of them, if you choose. We’ve been taking the RMD each year from his IRA at this company, and it has been accomplished by transferring stocks from the IRA to our taxable account (with a little bit of cash to make the number come out right). We’ve had to pay income tax on the RMD amount.

I don’t really understand the tax situation when stocks are held in an IRA. When there’s a distribution, it’s taxed as ordinary income. I understand that the initial investment was income from a previous year that wasn’t taxed. So it makes sense to tax that. But the growth would have been long-term capital gain, which could have been taxed at a lower rate. And now the stocks are sitting in a taxable account. Do we have to pay capital gains taxes when we sell them? That would be double-taxation, I think. Unless the basis is adjusted somehow.