Rollover
I have a client that was sent a stock certificate titled in her name. Can we sell the stock and rollover the cash within 60 days without a penalty. The stock was originally in her 401K
I have a client that was sent a stock certificate titled in her name. Can we sell the stock and rollover the cash within 60 days without a penalty. The stock was originally in her 401K
Permalink Submitted by Alan - IRA critic on Mon, 2017-05-01 19:36
Assuming the stock is not part of an LSD to which NUA is to be applied, the client can sell the stock and roll over the cash proceeds to an IRA within 60 days. No gain or loss is recognized on the sale, but there will probably be a 1099B issued by the selling broker and the client will have to report the sale on Form 8949 with cost basis equal to amount received and provide an explanation for the cost basis shown if the broker does not report the cost basis as equal to the amount received. Client cannot keep the stock and substitute his own cash to complete the IRA rollover. The 401k distribution would be reported on lines 16a and 16b as a rollover on Form 1040, as well as the stock sale on Form 8949 if a 1099B is issued.