By - lekararik
Any buys/sells/exchanges within a tax advantaged account are never taxable. That’s literally one of the advantages of the tax advantaged account.
IRAs are tax advantaged accounts just like a 401k is a tax advantaged account.
The IRS is only interested in entries/exits from the account itself (contributions/disbursements)
Good Morning u/lekararik!! This is u/FidelityBrent with r/fidelityinvestments,
Individual Retirement Accounts (IRAs) are tax-deferred plans. This means that the investments you buy and sell within the IRA will not be subject to capital gains taxes. Generally, you are taxed when you take distributions (withdrawals) from the IRA and the funds are not moved to another tax-deferred account.
If you choose to roll over your retirement plan into an IRA, it is important to select the right IRA for your needs. A Traditional (or Rollover) IRA is typically used for pre-tax assets because savings will stay invested on a tax-deferred basis and you won't owe any taxes on the rollover transaction itself. However, if you roll pre-tax assets into a Roth IRA, you will owe taxes on those funds. For after-tax assets, your options are a little more varied. You can roll the funds into a Roth IRA tax-free. You also have the option of taking the funds in cash or rolling them into an IRA along with your pre-tax savings. If you choose the latter option, it is important that you keep track of the after-tax amount so that when you start taking distributions, you'll know which funds have already been taxed. IRS Form 8606 is designed to help you do just this.
[Check out our Rollover tips and resources for more information on moving funds from a workplace retirement plan to an IRA.](https://www.fidelity.com/go/401k-rollover-hub/)
Before making a decision that may impact your financial situation, you may consider consulting with a qualified tax professional.
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You may find these links helpful:
- [General Information on Rollovers](/r/personalfinance/wiki/retirementaccounts/rollovers)
- [401(k) Fund Selection Guide](/r/personalfinance/wiki/401k_funds)
- [Retirement Accounts](/r/personalfinance/wiki/index#wiki_retirement)
- ["How to handle $"](/r/personalfinance/wiki/commontopics)
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