What are the tax implications of rolling over a Charles Schwab IRA into a digital asset investment?

1 answers

• Dec 18, 2021 · 3 years ago
  Rolling over a Charles Schwab IRA into a digital asset investment can have tax implications. It's important to consider the potential tax consequences before making this decision. Depending on the type of IRA you have, you may be subject to taxes on the amount rolled over. Traditional IRAs are funded with pre-tax dollars, so when you withdraw the funds, you'll owe taxes on the amount. If you roll over your traditional IRA into a digital asset investment and later sell the assets at a profit, you'll be subject to capital gains taxes. On the other hand, if you have a Roth IRA, contributions are made with after-tax dollars, so qualified withdrawals are tax-free. However, if you roll over your Roth IRA into a digital asset investment and sell the assets at a profit within five years, you may be subject to a penalty. It's always a good idea to consult with a tax professional to fully understand the tax implications and make an informed decision.
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