Can I move stock without selling to satisfy my IRA distribution?


Q. Last week I read that you can transfer stock from your IRA to your regular stock account to meet your Required Minimum Distribution (RMD). Is that correct?
— Investor

A. Yes.

You are correct. You can withdraw shares of stock in-kind from your IRA to satisfy your Required Minimum Distribution (RMD).

But there are a few things to remember when making an in-kind stock distribution instead of cash.

First, this option does not eliminate the requirement to pay taxes on the distribution as you would if you distributed cash, said Michael Green, a certified financial planner with GYL Financial Synergies in Parsippany.

“You will pay tax based on the value of the shares at the time of the distribution, even if you purchased the shares for more than the current market value,” he said. “You must also be sure that the value of your shares meets the RMD amount. Not withdrawing enough to cover the RMD will cost you a 50% penalty.”

An in-kind distribution of stock resets your basis, Green said.

The value when transferring the shares to your non-IRA account becomes your new tax basis, he said.

This also sets the time frame.

“The date of the transfer becomes your new starting point for capital gains,” he said. “That means shares that may have been held longer than a year before distributing will now reset to short-term. If you want to take advantage of the more favorable long-term tax rates, you will have to hold the shares for a year from the distribution date before liquidating them.”

Be sure to account for market fluctuations when taking an in-kind distribution, Green said.

For example, the share price could move during the time it takes to process the RMD distribution, he said.

“This may cause your RMD amount to be more or less than what you are required to distribute. If the price movement causes an under-distribution, you will need to take steps to distribute the amount to meet your RMD,” he said. “On the other hand, if the movement causes an overdistribution, then you will pay more in taxes than you are required to by the IRS.”

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This story was originally published ion Sept. 20, 2022. presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.