Reply To: Cost Basis Of In-Kind Stock Distributions From Inherited IRA

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#4646
kaneohe
Participant

More typically, RMDs are taken in cash and are fully taxable (assuming that this a traditional IRA, not a Roth). For in-kind distributions, you are typically taxed on the full value of that distribution so it is like you took a cash distribution and did a buy transaction w/o paying any fees. In this case your cost basis in your taxable account would be the value when distributed.

https://www.irahelp.com/forum-post/17663-cost-basis-stocks-transferred-out-ira

There is not really a cost basis for stocks in the IRA since the distributions are typically fully taxable. Brokerage firms sometimes use that term but it is only to show if the stock had a gain or loss since you bought it and it has no meaning tax-wise since taxes are not based on the gain but on the total value of the distribution typically.

The only real basis in any IRA is if you had a non-deductible contribution
which would not be taxed when distributed.