it is best to 'distribute low', but market timing is almost impossible.
example: my Trad IRA has $1,000,000 balance in stocks. The stock market tanks to $1. I distribute the entire balance in kind to my non-qual accounts and pay the 22 cents in ORDINARY tax..
The market sky-rockets and my investment is again worth $1,000,000. My cost basis is $1, so if this is sitting in a Roth, no additional tax to be paid (assuming I am over 59.5 years old and the Roth has been open for 5 calendar years upon distribution). If this is sitting in a non-qual account, I get capital gains treatment (after one year) and if it's still in the account when I pass, my heirs get the benefit of the step-up.
