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Post by Chahta on Jan 29, 2024 15:12:44 GMT
I am going to position the holding I want to use for my first RMD next year, based on 2024 year-end portfolio value. I plan to use an in-kind transfer. Do the shares keep the original cost basis or are the shares transferred at the current cost?
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Post by Capital on Jan 29, 2024 15:58:59 GMT
I am going to position the holding I want to use for my first RMD next year, based on 2024 year-end portfolio value. I plan to use an in-kind transfer. Do the shares keep the original cost basis or are the shares transferred at the current cost? - this should help Chahta. |
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Post by yogibearbull on Jan 29, 2024 16:17:10 GMT
As the link by Capital indicates that with in-kind RMD, the cost-basis would be rest and the taxable RMD amount will be the value on the transfer date. The benefit of in-kind transfer is that there is no time out of the market. Because selling in T-IRA, taking RMD in cash, then buying the same stock/fund in taxable a/c could have a gap of 7-10 days, especially if different fund firms or brokerages are involved. But if both accounts (T-IRA and taxable) at the same fund firm or brokerage, any T-IRA to taxable a/c transfer/exchange may be overnight and the specification of in-kind may not be necessary. But if gifting, or making transfers among taxable accounts, specifying in-kind is important to keep the cost basis and avoid immediate potential tax hit. |
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Post by fritzo489 on Jan 29, 2024 18:44:20 GMT
Chahta, Capital, yogibearbull, After reading link it raises two questions. Can I do a in-kind with mutual fund (s) & how does one pay the taxes ? File estimated or have your brokerage take money from taxable & send into Feds to cover taxes ?? Maybe brokerage transfers some & also sells enough to cover taxes ? Thanks , fritzo489
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Post by Chahta on Jan 29, 2024 23:40:27 GMT
Chahta , Capital , yogibearbull , After reading link it raises two questions. Can I do a in-kind with mutual fund (s) & how does one pay the taxes ? File estimated or have your brokerage take money from taxable & send into Feds to cover taxes ?? Maybe brokerage transfers some & also sells enough to cover taxes ? Thanks , fritzo489 I am thinking the in-kind transfer is like a Roth conversion but to a taxable account. The Roth conversions I have done the last few years I specified no taxes to be taken. I just squared up on April 15th. Might be better to take a second amount to keep the RMD transaction clean. |
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Post by liftlock on Jan 30, 2024 3:47:20 GMT
Chahta , Capital , yogibearbull , After reading link it raises two questions. Can I do a in-kind with mutual fund (s) & how does one pay the taxes ? File estimated or have your brokerage take money from taxable & send into Feds to cover taxes ?? Maybe brokerage transfers some & also sells enough to cover taxes ? Thanks , fritzo489 At Fidelity, in-kind transfers are valued using closing prices at end of day. In-kind transfers from a T-IRA to a Roth IRA can be done online. In-kind transfers from a T-IRA to a taxable account require a call to customer support for execution. I take all dividends in cash to fund RMD distributions for tax withholding, QCDs, and spending. I find it simpler to plan, execute and track income tax withholding using cash. I use in-kind transfers for stocks I plan to hold long term, especially when they are down substantially in price. Timing of In-kind transfers when the market is down becomes an opportunistic challenge. I track all IRA distributions in a spreadsheet as I execute them so I know exactly where I stand. I have never done an in-kind distribution for a mutual fund, but I don't see why that can't be done. |
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