I sold shares of a mutual fund & other stocks in order to pay a down payment on a first time home purchase. Do I still have to pay capital gains tax on those investments even though the $$$ was invested straight into a home?
Yes. If the funds were sold in a taxable account you will still pay tax on the capital gains. If that money was in a IRA then it will be taxed at the regular income rate but you will not have to pay the 10% penalty. In this case you can pull out a maximum of $10,000. If it was in a Roth IRA and you have held it for 5 years then you can pull out the principal tax free.
In the last 5yrs 84.15% of large cap mutual funds underperformed the S&P 500. Indexing is so much better for the everyday investor.
- Thursday Aug 25 - 1:57am