Question

Should I pay 20 percent on income from investments that I did not take out?

Forum|Forum|4 years ago
February 10, 2022
1 reply
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TurboTax Deluxe Online

Yes.

Often your investments inside an investment account are sold without you ever touching the money. The profits are then used to purchase more investments inside the account.

Unfortunately, the IRS doesn't tax you based on what you do with the money. They just tax you if you make it. And you did make the money even though it stayed in your investment account to buy more stuff.

So yes, you have to pay taxes on your investments even if you didn't take the money out of the account.

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