Permalink Submitted by Alan - IRA critic on Mon, 2015-06-01 18:26
Securities of all kinds can be distributed in kind from an IRA, either as an RMD, a conversion to a Roth IRA, or to a taxable brokerage account. The cost basis of shares in the taxable account is their value upon distribution and the holding period starts on the date of distribution. An in kind distribution eliminates time out of the market and saves on buy and sell commissions. Note that if you take an in kind distribution from an IRA and then decide to roll it over, you MUST roll over the same property you received. You cannot sell it and roll over the proceeds (as you could if the distribution came from a qualified plan).
Permalink Submitted by James Beard on Thu, 2018-01-11 03:35
I agree with the several posts on this forum that the holding period for in-kind distributions from an IRA starts the day after the distribution is received. However, I have not been able to find anything in IRS literature that states this. Could anyone point me to any IRS documentation on the subject that might be persuasive to the “bright” folks at Vanguard? Many thanks in advance!
Permalink Submitted by Alan - IRA critic on Thu, 2018-01-11 04:11
There are several places that the IRS could have published clear guidance on this. So far, the only specific reference located is too targeted, but it is still a reference. Pub 544, p 37 includes this:
Profit-sharing plan. The holding period of common stock withdrawn from a qualified contributory profitsharing plan begins on the day following the day the plan trustee delivered the stock to the transfer agent with instructions to reissue the stock in your name.
Permalink Submitted by Jose Morales on Mon, 2015-06-01 15:14
Yes, an “in kind” distribution can be done from an IRA.
Permalink Submitted by Alan - IRA critic on Mon, 2015-06-01 18:26
Securities of all kinds can be distributed in kind from an IRA, either as an RMD, a conversion to a Roth IRA, or to a taxable brokerage account. The cost basis of shares in the taxable account is their value upon distribution and the holding period starts on the date of distribution. An in kind distribution eliminates time out of the market and saves on buy and sell commissions. Note that if you take an in kind distribution from an IRA and then decide to roll it over, you MUST roll over the same property you received. You cannot sell it and roll over the proceeds (as you could if the distribution came from a qualified plan).
Permalink Submitted by James Beard on Thu, 2018-01-11 03:35
I agree with the several posts on this forum that the holding period for in-kind distributions from an IRA starts the day after the distribution is received. However, I have not been able to find anything in IRS literature that states this. Could anyone point me to any IRS documentation on the subject that might be persuasive to the “bright” folks at Vanguard? Many thanks in advance!
Permalink Submitted by Alan - IRA critic on Thu, 2018-01-11 04:11
There are several places that the IRS could have published clear guidance on this. So far, the only specific reference located is too targeted, but it is still a reference. Pub 544, p 37 includes this:
Permalink Submitted by James Beard on Thu, 2018-01-11 16:27
Thanks for the prompt resonse, Alan!Upiv