"Hugh Clary" <badinage[at]netzero.ZAPTHISnet> wrote in message
news:48c9334d.6882015[at]news.individual.net...
- quote -

wait a minute! I keep hearing certain people saying only the super rich
have capital gains. What the heck?

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Hugh Clary wrote:
- quote -

Hugh, the tax break doesn't apply to all income types, just long-term
capital gains and "qualified dividends", both from investments held in
taxable accounts. An IRA distribution is "ordinary income" which is
taxed at the normal bracket rates.

That $65,100 figure is the top of the 15% tax bracket for married
couples who file jointly...really the tax code states that the long-term
capital gains rate is 0% for someone in the 15% or lower tax brackets.
Someone in that situation (the majority of taxpayers) could sell a stock
or mutual fund held in a taxable account, and pay no tax on the gains,
as long as their total income remained under $65,100.

Example: You figure out your taxes and end up with $55,000 in taxable
income. You have a mutual fund with $10,000 in long-term gains. You
could sell the mutual fund and pay no federal income tax, because your
taxable income is $65,000, which is below the top of the 15% tax
bracket. When you calculate your taxes, the worksheet will take out that
$10,000 and give it the 0% tax rate. Your state taxes would still apply.

-Tad

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On Sep 11, 10:36*am, "Andrew Koenig" <a...[at]acm.org> wrote:
- quote -


I believe you are correct. And removing funds from the IRA bumps the
income above $65,000 is another concern. Also early withdrawal
penalties may apply.

In other words, it's true, but not too good for most people.

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"Hugh Clary" <badinage[at]netzero.ZAPTHISnet> wrote in message
news:48c9334d.6882015[at]news.individual.net...

- quote -

Aren't capital gains in an IRA taxed as ordinary income when withdrawn?

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According to this month's AARP magazine, Congress is
allowing (through 2010?) a tax break on securities held
longer than one year, to couples with incomes less than
$65,100. I am thinking I could take money out of one
or more of our IRAs, assuming our then-total income is
less than the $65k number, paying no tax on those dollars.

Still, what seems too good to be true likely isn't. Is anyone
here familiar with this issue, and am I safe in removing
X amount of money from present IRAs, paying no additional
taxes thereby?

HC

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