Sorry guys if this has been asked before, but am I correct in thinking that there are no taxes on the div's or cap gain if selling the stock when you hold this in a traditional IRA? It would just get deferred until you start to take distributions, correct?
correct. But Dividend is mostly cap gain taxed at lower rate. In an IRA, income is deferred but will be taxed at the higher tax rate of ordinary income. Therefore, if have both IRA and regular investable funds, better off keeping this outside the IRA and putting something with worse tax consequences into the IRA such as taxable interest.
Okay, that makes sense. Yes, I have a regular brokerage account and the Traditional IRA. I don't have a Roth, and don't want to open a new account at this time because I would only have enough to fund this one purchase for at least the next year or so (perhaps at some point in the future).
I have stayed away from purchases of MLP's due to the UBTI tax issues, but am looking at buying long-dated calls on some of these as there is relatively zero premium baked into the numbers, but the growth rate of the underlying company would serve for some moderate price appreciation. Honestly, the return would be maybe half of the regular appreciation plus dividends, but I don't know enough about handling the tax situation on the payouts to warrant taking that route.