Converting Traditional IRA to Roth IRA
Can stock positions held in a traditional IRA be “Transferred-In-Kind” to a Roth IRA? Or do the stock positions have to be “Liquefied” before the funds can be transferred to a ROTH? Thanks!
Can stock positions held in a traditional IRA be “Transferred-In-Kind” to a Roth IRA? Or do the stock positions have to be “Liquefied” before the funds can be transferred to a ROTH? Thanks!
Permalink Submitted by David Mertz on Tue, 2024-01-16 14:26
Roth conversions can be done in-kind. The taxable amount of the Roth conversion is determined using the value of the shares upon distribution from the traditional IRA.
Unless there would be a transaction fee on the sale or purchase of the shares or the position is illiquid, there is really no difference between an in-kind conversion and a sale of the shares within the traditional IRA, a conversion using the cash and a repurchase of the shares within the Roth IRA at the same price.