I have an IRA that contains some stocks that are losses. This year I am required to take a RMD. I want to transfer the stock to a regular taxable account as my RMD so that I continue to own that stock in my taxable account. What is the basis value of this stock, the original purchased price or the price on the day that I took the distribution. I'm trying to determine if there is any way I can utilize the loss on the stock price on my taxes, which I know I can't do in an IRA account.
You'll need to sign in or create an account to connect with an expert.
You cannot take a loss within an IRA. IRA RMD's must be taken in cash or cash equivalent. IF the IRA custodian will even allow stock transfer (ask the custodian) then the cash value, for RMD purposes would be the stock selling price at the time of the transfer (the same as if you simply sold the stock withing the IRA and distributed the proceeds as your RMD, or part of the RMD - that is the value that the IRA custodian would report on the 1099-R. The new basis for the stock in the taxable account would be that same value. This would be no different that simply selling the stock in the IRA and using the proceeds to purchase stock in the taxable account. Since gains and losses within an IRA are not reportable, the original cost basis is meaningless once the stock is in an IRA.
User @dmertz - do you concur?
You can make an in-kind distribution to satisfy your RMD; there is no requirement that the RMD be made in cash. The gross distribution amount will be based on the value of the stock at the time of the distribution and the value distributed becomes the cost basis of the shares outside the IRA. The holding period for capital gains treatment also begins on the date of the distribution. Ignoring any transaction fees, the result will be equivalent to selling the shares inside the IRA, distributing the cash, then repurchasing the shares outside the IRA (assuming that the repurchase is on the same day at the same share price).
Satisfying an RMD with an in-kind distribution is a little more tricky than doing it with cash because of the constantly varying share price. The distribution might come up a little bit short or over relative to the RMD amount. If you come up short, you'll need to make an additional distribution to complete the RMD. If it comes up over you could potentially roll over the excess shares distributed, keeping in mind the one rollover per 12 months limitation, but that's a bit of a tricky prospect in itself. If you are anticipating a rebound in the share value it would generally be better to leave the amount in excess of the RMD distributed and have that rebound be taxable as long-term capital gains by holding the shares for at least a year after the distribution date. But there is no way to realize the loss already incurred in the IRA. That loss simply represents an amount which you will not have to include in income because it's an amount that will never be distributed from the IRA.
Still have questions?
Make a postAsk questions and learn more about your taxes and finances.
moontess
New Member
catsci06
New Member
RHBsr1
New Member
wscroggins-outlo
New Member
wscroggins-outlo
New Member
Did the information on this page answer your question?
You have clicked a link to a site outside of the TurboTax Community. By clicking "Continue", you will leave the Community and be taken to that site instead.