From a tax perspective, Dividends, Interest, Capital Gains, and Losses don't matter in an IRA. For example, if you have losses, you can't write those off on your taxes. Rather, the IRA is completely TAX FREE until you start withdrawing. Then, you are taxed only on the amount you withdrawal (plus a 10% penalty if prior to 59 1/2 years old and you didn't put the money back in within 3 months). During the withdrawal period, there is a required minimum amount you must take out depending on your age and the balance of the account at prior year end. It's called RMD (Required Minimum Distribution).

Still, even after you start withdrawing the money, the trading activity inside the account happens tax free.

The maximum applies to your deposited amount. Once it is in the account, any gains you make through trading are not taxed until you take them out, hopefully after age 59-1/2.

Contributions and capital gains are two TOTALLY separate things.

So I know that capital gains on investments in an IRA account is tax-deferred until they are withdrawn. There is an annual limit of contribution is 5,500 or 6,500. So I am a bit confused about how trading in an IRA account actually works. Does this mean if the value of your investment exceeds 5,500 or 6,500, then whatever excess amount would be charged an excise tax?

Thanks.