Whether transactions inside a roth/traditional IRA incur a current tax liability
Wikipedia about Roth IRA says about its differences from traditional IRA
Transactions inside a Roth IRA (including capital gains, dividends, and interest) do not incur a current tax liability.
What does a current tax liability mean?
Do transactions inside a traditional IRA incur a current tax liability?
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Current tax liability means that you'd have to pay taxes on the capital gain, dividend or interest incurred by the transaction. In some cases, there may be a portion withheld to cover the taxes in some cases.
Do transactions inside a traditional IRA incur a current tax
liability?
No, though there is a deferred tax liability as all distributions from a Traditional IRA are taxed as ordinary income.
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