If you had 250K in the market, meaning the stock market, you would have been paying taxes on the "interest" all along in the form of the taxes imposed on dividends that the stocks were generating. The only taxable event that occurs when taking money out of the stock market is any capital gains that may result. Hence if you bought your stock portfolio a number of years ago and paid 200K (i.e., its cost basis), then your capital gains would be 50K (250-200=50). You would then pay capital gains tax on the 50K. The current maximum rate for this is 15% which is likely better than if the gains were taxed as ordinary income.
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