When you pull the money out, it’s taxed as regular income, just like a paycheck.
After you’re 59.5, your withdrawals are taxed as regular income, not capital gains.
I’ve been trading in my IRA for years. I’m at the point where I have to take Required Minimum Distributions (RMDs), but only the withdrawals are taxed.
Even your RMDs after age 70.5 are taxed yearly. For example, if you have $500,000 in a taxable IRA at the end of 2023 and you’re taking your first RMD at age 73, your RMD would be $18,868. That gets added to your other income and is taxed like regular income.