When I sell stock that is in an IRA account, am I taxed when the stock is sold or when I receive the proceeds?
This is a good question and I think it may be missing a key piece of information, is this a traditional IRA or a Roth IRA.
I will discuss what would happen in either case, just in case I pick the wrong type of IRA. There are some similiarities which will pertain to both a Traditional and Roth. You will not pay taxes on any gains from the sale of a security while it is owned in either type of account.
So for example, you buy company XYX at $50 in either of these types of account and then are fortunate enough to sell it a year later at $100, there will not be any taxes owed.
The roads diverge later on in life when you begin to look to take withdrawals. When you begin to take withdrawals from your IRA, you will be taxed on those withdrawals as ordinary income after you are 59 1/2. Prior to 59 1/2 you will incur an additional 10% penalty, unless you satisfy one of the exceptions. The reason you will be taxed at this time is because you have received a tax deduction (most likely) upon making the contribution to the account. When you begin to start withdrawals from a Roth IRA, you will not be taxed on these withdrawls. The reason you will not be taxed on these withdrawals is due to the fact that the contributions to this account were made with after tax dollars.
The key here is that you will not be taxed at anytime while buying and selling within the IRA account itself, does not matter IRA or Roth. The taxes will come into play when you look to make the withdrawal depending on which type of account you have and when those withdrawals take place.
Best of luck and be sure to consult with a fiduciary advisor if you need further classification for your own personal situation.
If your money is in a Roth IRA account, then all taxes have already been paid so you will not have to pay taxes when the stock is sold or when you receive proceeds. If the account is a traditional IRA, then you will owe taxes on it when you withdrawal the money at your tax rate in the year of the withdrawal and there can be a 10% penalty if you withdrawl the money before you turn 59.5.
You are only taxed when you withdraw money from the IRA. Any money withdrawn from an IRA is taxed as ordinary income, but if you withdraw the money before age 59 1/2, you'll be subject to an additional10% penalty tax. Therefore, feel free to buy and sell as much as you'd like within the IRA with no tax consequences (i.e. no income or capital gains tax owed).
Transactions in an IRA are tax deferred. You owe tax when you put money in your hand; when you withdraw funds from the IRA. You can do unlimited transactions inside the IRA account with no tax ramifications until you take the money out of the IRA tax status.