I am new to this forum. Need info on IRA distribution

[metro9]

I am new to this forum.  Need info on taking distributions from tradional ira.  Stocks in the ira account have appreciated.  Qquestions:
(1) if I sell the stock in the ira account, are the cash proceeds subject to capital gain tax?
(2) If I take the cash as distribution, will it be subject only to ordinary income tax?
(3) If I transfer the appreciated stock to a taxable account, the dollar value of the stock will be considered distribution which will be taxed as ordinary income?
(4) if I transfer the stock to a taxable account and pay the ordinary income tax on the distribution, can I keep the stock for further gains and use the distribution price as the cost basis?

Where I can get info on such questions?  Thanks

 

[Nords]

Welcome to the board, Metro. 

(1) if I sell the stock in the ira account, are the cash proceeds subject to capital gain tax?

No, IRA transactions are tax-free when the proceeds stay in the IRA.  It's moving the proceeds out of the IRA that makes them subject to income tax.

(2) If I take the cash as distribution, will it be subject only to ordinary income tax?

Yup, provided that you're at least 59 1/2 years old.  This is a minefield of exceptions, though, so read up on the subject before you start taking money out of the IRA.

(3) If I transfer the appreciated stock to a taxable account, the dollar value of the stock will be considered distribution which will be taxed as ordinary income?

Transfers such as you describe aren't done between IRAs and taxable accounts.  You'd have to sell the appreciated stock, transfer the cash from the IRA to a taxable account (subject to the age & distribution restrictions!), and purchase the stock.  The amount of money that's transferred is income.

(4) if I transfer the stock to a taxable account and pay the ordinary income tax on the distribution, can I keep the stock for further gains and use the distribution price as the cost basis?

The transfer is actually a sale, and once you've taken the cash out of the IRA you can do whatever you want with it (subject to taxes & penalties).  But the cost basis will be the price you pay for the new investment.

Where I can get info on such questions?  Thanks

There are a few places:
- IRS Pub 590, the rulebook.
- A library copy of Ed Slott's book "The Retirement Savings Time Bomb".
- And finally, posting these questions at Ed's discussion board, where experienced & published CPAs live to answer any IRA question no matter how basic or obscure.