While an in-kind distribution from an IRA must be rolled over in-kind (same-property rule), that rule does not apply to distributions from non-IRA employer plans. From IRS Pub 590-A:
Sale of property received in a distribution from a qualified plan. Instead of rolling over a distribution of property other than cash, you can sell all or part of the property and roll over the amount you receive from the sale (the proceeds) into a traditional IRA. You can’t keep the property and substitute your own funds for property you received.
