Can One Convert to a Roth IRA "in kind"?

How common is it to convert “in kind” from a traditional IRA to a Roth IRA? I’m thinking about converting all of my ETrade Traditional IRA to a Roth IRA, but I’d like to NOT have the friction of selling and rebuying the securities in the account. I have money, elsewhere, to pay the tax that will be due. Is an “in kind” conversation common or will ETrade not know what to do?

Well, I’m not sure how ‘common’ it is, but I know that it’s possible (i.e. legal) to do so. That said, it depends on what your brokerage allows. Transferring in kind can introduce some ‘squishiness’ in actually how much is converted, especially for volatile and/or thinly traded assets. Is it the last sale price, the next sale price, some average of high and low prices on that day, or the opening and closing prices, etc.? Because of that, brokerages may not allow all assets to be converted in kind, and for those that they do allow to be converted in kind, they probably have some policies and procedures in place on how the value is set. You should be sure that you understand those policies and procedures, so you understand what will be shown on your 1099-R.

I will also say that if you are trying to convert to a Roth IRA that’s at a different brokerage than the Traditional IRA is at, both brokerages would have to allow you to do so, and it would likely need to be a trustee-to-trustee transfer. In other words, you probably wouldn’t be allowed to take the shares out of your IRA at one brokerage and deposit them into a Roth IRA at another brokerage. It may be that the brokerage with the Roth IRA would require you to do the in kind transfer to a Traditional IRA account at their brokerage first and then do an in kind conversion to the Roth IRA, rather than directly receiving the in kind shares into the Roth IRA.

That’s good, especially if you are under 59 1/2, as withholding for taxes from a Traditional IRA is actually distribution from the IRA and is therefore subject to taxes and penalties.

I will also say that you should be sure that you will meet a safe harbor, or make an estimated payment, so that you will avoid any penalties for underpayments.



Given the markets’ huge sell off this year, it’s a great strategy to consider for beaten down stocks that you still believe in long term. Pay taxes on the reduced basis and enjoy full tax-free gains and withdrawals in perpetuity!

Thank you for the long reply. Maybe I didn’t give enough into to get a less complicated answer, so I’ll rework my question:

I’d like to convert (transfer “in kind”) my Traditional IRA, with standard, publicly traded stocks and mutual funds, at ETrade, to a Roth IRA with exactly the same assets, also to be at ETrade. The new account should end up looking like the old account, except it will generate a 1099-R for me to report the amount of the conversation on my tax return. Is this type of transfer a common, everyday thing?

My Federal Income Tax estimated payments already meet the “safe harbor”.

The main question is whether this is an everyday type financial transaction or is this a unicorn?

As I said, it’s legal to do this. I don’t know how common it is, but think it’s common enough to not be considered a unicorn - maybe just a rare species. ETrade would have to tell you any restrictions that may impose on the holdings that you have, since ‘publicly traded’ doesn’t necessarily mean ‘not thinly traded’ and ‘not volatile’. Mutual funds will probably be valued based on their end of day price, since that’s how mutual funds generally work. ETFs and stocks may be valued based on the market price as of the time of the transfer, or some other price during the day - you will have to ask eTrade.


OK, but the question is why. These days most transactions are no commission. So nothing gained by direct transfer in most cases.

Two exceptions I can think of is thinly traded stocks where bid ask spread can be wide, especially for a large transaction. Another is load funds where load is charged front end on the purchase price. Or back end on the sell price. And then there are funds that have a separation fee if you sell before a given date.

Slippage. I have a large IRA. If sell on Monday, have the transfer set for Monday night, then have to rebuy on Tuesday morning, anything can happen. I choose not to gamble on negative slippage. And on the no load mutual funds, there will be a one-day slippage too.

Overnight in a normal market, stock price slippage is likely to be small. However, slippage is built in (negative or positive) with mutual funds, since their price is only set end-of-day: they have a potful of stock/debt instrument holdings that have to settle on EOD prices before the fund can set its NAV price.

Eric Hines
*Who’s also on’s Tax Strategies board.

I disagree about overnight stock price slippage. And what’s a normal market?

If you can only sell at the coming closing price (set after market close for mutual funds) and then can only buy at the next day closing price, then those two prices are likely to be different.

ETFs are different, their prices change all throughout the day.

Hi @Daryll44,

Let me simplify this for you.

Yes, you can transfer stock from your trad IRA to your Roth IRA as a Roth conversion!

I did this for 13 annual Roth conversions for the trad IRA’s of my DW and I starting in 2010 and the final one was January 2022.

Schwab has the option on their website which allows me to choose which stock and how many shares plus cash if I want that.

Schwab posts the transfer value in the “History” list so I was able to track my conversion amount accurately. My old broker used the “end of day” value.

If you want to hold the securities, just transfer them!

No waiting for settlement or anything else.

Does that help you?

All holdings and some statistics on my Fool profile page (Click Expand)


VERY much so! Thank you!