L1: capital lossesRegarding taxes, can capital losses be taken for stock losses if sold within a 72 T if securities qualify and if so how? meaning one year or over a period of years?2009-03-26 20:05, By: JJ, IP: [220.127.116.11]
L2: capital lossesNo, investment losses in any retirement account, IRA, SEPP 72-T, ROTH IRA, 401-K, pension, etc. can never be deducted. Further, all distributions from retirement accounts are taxed at regular tax rates. So, qualified dividends, capital gain dividends, and capital gainswould be taxed at 25%-35% when distributed, rather than at 15% if these same investments were not in retirement accounts.That is a primary reason why retirement accounts should be invested in fixed interest investments, and investments in stocks should be in regular accounts outside of retirement accounts.
Most brokers and investment “advisors” never tell investors about these distinctions in the tax aspects.2009-03-26 20:43, By: dlzallestaxes, IP: [18.104.22.168]
L3: capital lossesDLZ says …
“That is a primary reason why retirement accounts should be invested in fixed interest investments, and investments in stocks should be in regular accounts outside of retirement accounts.”
Well, if your only consideration is taxes, then this might be a good argument. But fixed investments over the longrun won’t provide the growth needed for a successful retirement plan. That’s why a well diversified portfolio of fixed, equity and alternative investments is the best approach for a good retirement plan. Of course you have to monitor the investment percentages and make changes for the given investment climate during the accumulation years of your plan.
Taxes is not the only consideration.
Jim2009-03-26 20:59, By: Jim, IP: [22.214.171.124]
L4: capital lossesI agree that there should be adequate/appropriate diversification in everyone’s portfolio. The equity portion should be outside the retirement accounts, and the fixed interest portion should be inside the retirement plans. The only time hat I think that equities should be inside a retirement plan is for people who do extensive trading becuase then they would usually have primarily short-term gains, or accumulate significant axes being paid over the years which reduce available funds to invest.2009-03-27 00:38, By: dlzallestaxes, IP: [126.96.36.199]
L2: capital lossesSince 72(t) / SEPP Plansdeal with earlywthdrawals from tax favored planslike IRAs, 401(k)s, etc., you do not recognize tax gains and losses. Since most contributions are made pre-tax, then all distributions are made fully taxable and treated as ordinary income. One exception to “all distributions” being taxable occurs when you have after-tax contributions to your plan, like non-deductible contributions to a Traditional IRA. In this case you use your basic Form 8606 to record the contributions in the year made, and use the same Form 8606 to calculate the non-taxable percentage of any distributions from the account.
If you have tracked gains and losses in your account over the years then you know the account’s performance, but that’s the only benefit you have.
Jim2009-03-26 20:51, By: Jim, IP: [188.8.131.52]