Taking Private Bank Stock from an IRA

An 84 year old friend owns a private bank stock in his IRA. He wants to sell the private bank stock and he is being told that he first has to take the stock out of his IRA, then sell the stock, then put the proceeds back in the IRA.This sounded strange so I have a few questions.

1. If he is able to find a buyer, why can’t he just sell it within the IRA?
2. If he pulls the stock out and rolls the money back in within 60 days, will that be considered an eligible rollover?
3. Since he is over 70 1/2, how does he handle the RMD?

Thank you!



  1. Yes, he needs to sell it in the IRA. Often this requires having a self directed IRA custodian.
  2. No. Per Sec 408(d)(3)(a), the same property that is distributed from an IRA must be rolled back to an IRA. The IRA owner cannot sell the stock and roll over the cash proceeds or substitute other property for the specific shares distributed. 
  3. If he takes a distribution, to the extent his RMD has not been completed for the year, the distribution cannot be rolled over, not even a cash distribution. But if he sells the shares in the IRA, there is no distribution and no RMD.
  4. He could still have the shares distributed and the amount of the distribution would be credited toward his RMD if his RMD had not been previously completed. No part of the RMD can be rolled over and neither can the proceeds for selling the shares outside the IRA.

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