> stock is not usually bought and sold in fractional shares, so to do this with whole shares the return of contribution would have to be accompanied by some amount of regular distribution to account for the additional fractional share needed to make a whole share. If the in-kind distribution was able to consist of fractional shares such as is possible with a mutual fund, this wouldn't be an issue.
The removal was done with exact fractional shares. It was not a mutual fund, it was an ETF, and they removed fractional shares.
> I would never suggest that anyone do an in-kind distribution for a return of contribution. It serves no purpose other than to avoid a round-trip sale and repurchase and to ensure the that transaction is completed timely such that the cost basis of the shares outside the IRA is the same as the distributed value.
Originally my plan was to just sell shares and remove the cash. However, when I received the Removal of Excess form from TD, and saw that it allows me to list other assets to be removed, I called TD to ask the exact question in the original post: if I remove shares, does it transfer the original cost basis out of the account such that when I sell the shares (now in a taxable account), I use the original cost basis of the shares when they were purchased, and thus can realize the loss. I was told yes, that's how it works. I hung up and called two more times to ask the same question to two more staffmembers to be sure. That was the purpose.
