FMV of a publicy traded stock on a given day is it's FMV regardless of situation. For example, FMV on date of death uses market data on the date of death (unless on a day where the market was closed), never the day before. The same should apply for in-kind transfers from IRA to taxable account. The FMV is the FMV on the day the transfer initiates. This much is well documented and rather apparent after even the most rudimentary research. The details of how the market data on a given day are used to compute FMV may be debatable, but there is NOTHING I've found so far that supports using market data from the PRIOR day to compute FMV of a publicly traded stock. Doing so seems clearly incorrect and might well be a legacy habit some big brokerages have been getting away with, not because it is legal or ok. The bottom line is that it is certainly not ok for the client if the FMV is being applied and reported incorrectly.
If anybody can point at any credible documentation indicating it is okay to use prior day closing price as FMV for an in-kind transfer of publicly traded stock from IRA to taxable account, please share.
SE
