Buying a new car — paying cash — from which account?
I am 72 years old and want t
o buy new car and pay cash. Should I withdraw from IRA or cash in stock?
Terry Says
That depends on your personal tax situation, so you should discuss with your accountant.
If you sell stock, you will pay the lower capital gains tax rate.
If you take money out of your IRA –which you must do for sure next year when you turn age 73 — you will pay ordinary income taxes on the gains. So if you can wait for that car, do the withdrawal next January when you must take money out anyway! Ask the IRA custodian to withhold taxes on your withdrawal, whether you do it no or later.
