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posted Jun 1, 2019 1:31:35 AM

Can I sell an IRA mutual fund and keep the proceeds in the brokerage, core/cash account for a MRD the following year?

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Level 15
Jun 1, 2019 1:31:36 AM

If you take the proceeds of the sale out of the IRA, you have made an IRA distribution, and you will have to report it as taxable income in the year you take it. It's a distribution from the IRA, even if you keep the proceeds in your brokerage account. If you do that in 2019, you will still have to take your MRD in 2020 (if you are required to). You can't count a distribution in 2019 as a 2020 MRD.

If you don't want it to be a distribution this year, you should keep the proceeds in the IRA. Sell the fund you want to sell and purchase a different fund in the IRA. If you want it to be in cash, buy a money market fund in the IRA. The brokerage might call this an "exchange,"  but it's a sale of one fund and a purchase of another. If you keep it in the IRA it will not have any tax consequences.


2 Replies
Level 15
Jun 1, 2019 1:31:36 AM

If you take the proceeds of the sale out of the IRA, you have made an IRA distribution, and you will have to report it as taxable income in the year you take it. It's a distribution from the IRA, even if you keep the proceeds in your brokerage account. If you do that in 2019, you will still have to take your MRD in 2020 (if you are required to). You can't count a distribution in 2019 as a 2020 MRD.

If you don't want it to be a distribution this year, you should keep the proceeds in the IRA. Sell the fund you want to sell and purchase a different fund in the IRA. If you want it to be in cash, buy a money market fund in the IRA. The brokerage might call this an "exchange,"  but it's a sale of one fund and a purchase of another. If you keep it in the IRA it will not have any tax consequences.


Level 15
Jun 1, 2019 1:31:38 AM

The core account where the proceeds from a fund sale within the IRA are deposited *is* within the IRA, so the proceeds can remain in the core account.  The core account is often a money market account.