Retirement Savings and Benefits
Questions and comments about IRAs, 401k accounts, social security, and other forms of retirement savings and benefits.
plan to sell a r/o IRA stock
Posted by: hotdog, October 18, 2017 09:23PM
I plan to sell a stock in my R/O brokerage to contribute to my RMD . Can I use the cash value resulting from the sale to purchase the same stock in my individual non IRA
brokerage in the same year? Will the original cash purchase be adequate for a partial RMD year end
obligation for IRS review?

Re: plan to sell a r/o IRA stock
Posted by: Alan S., October 18, 2017 11:41PM
You can sell the shares and then transfer the exact amount of cash for the RMD to your taxable brokerage account to satisfy your RMD, then repurchase the shares in the taxable account.

Or you can also satisfy the RMD by simply transferring the required number of shares to meet your RMD to your taxable account if both accounts are with the same firm. That is called an "in kind" distribution because you are transferring shares rather than cash. This eliminates the cost of commissions to sell and then re purchase. The only challenge in doing an in kind transfer is the amount involved since stocks are always changing value.

Perhaps your brokerage till accept an order to transfer the amount of partial shares to exactly match the RMD amount. Otherwise, you could transfer enough shares to meet 95% of your RMD and once the transfer is complete, then transfer the rest of your RMD in cash.

When all is completed your 1099R in January reporting the IRA distribution must be at least as much as your RMD.

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