Roth Coversion LIFO/FIFO
A client posed the question, ” in a Roth conversion where we are doing an in kind movement of securities, does LIFO/FIFO matter?”
My thought was since it was originally purchased in an IRA, LIFO/FIFO shouldn’t be an issue. I wanted to make sure that I am not missing anything here.
Thanks,
Mike
Permalink Submitted by Alan - IRA critic on Thu, 2017-12-07 17:01
You are correct. Since the cost basis of individual investments is immaterial in an IRA or Roth IRA, there is no tracking or reporting done other than the gross value of the transfer. This is also true of a recharacterization of the conversion. If an in kind distribution of securities is done to a taxable brokerage account (eg RMD), the cost basis of those securities in the taxable brokerage is their value on the date of distribution, and the holding period starts at that time as well.