IRA Distribution of Stock
My client wants to take stock from his IRA as a distribution and then replace it with cash within 60 days. Is there any reason that he can’t do this?
My client wants to take stock from his IRA as a distribution and then replace it with cash within 60 days. Is there any reason that he can’t do this?
Permalink Submitted by Alan - IRA critic on Thu, 2015-07-23 19:25
This cannot be done. Per page 24 of IRS Pub 590 A, the distribution is tax free only if the same property that was distributed is contributed to the receiving IRA. He cannot sell the shares OR retain the shares and complete the rollover using cash. Note that this rule applies to IRAs, but does not apply to distributions of securities from a qualified plan. If he receive shares from a qualified plan, he CAN sell the shares and complete the rollover with cash, but cannot keep the property and substitute cash. (p 27 of Pub 590 A).
Permalink Submitted by Karol Quiring on Thu, 2015-07-23 20:26
Thank you for your help.