Roth Ira

[Stryke]

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From what i've read any money accumulated in your ROTH IRA is tax free.
(i know the initial investment is not tax deferred but any interest made on that investment is subsequently tax free).

My question is: If i buy and sell stocks in my ROTH IRA account, are any profits I make in this account also tax free?? ie. do I have to count these profits when i do my taxes?

 

[Sol Rosenberg]

Absolutely, that's the point of the ROTH IRA (think of it as tax-free EARNINGS, not just tax-free interest)

EDIT: To answer your specific question, if it is not clear -- no, you don't have to count that as profit on your tax return, so long as you follow all the Roth IRA rules.

 

[The White Coat Investor]

No taxes, ever, on that money. Yay for Roths! Although you'll incur brokerage fees and lose significant money in bid-ask spreads if you are a frequent trader.

 

[Stryke]

Thanks for the responses.

I guess if you trade frequently then the ROTH IRA would be the perfect account to make those trades in. Too bad we're limited to 4k per year..
although i think i heard that next year we can put 5k