Was suggested to post this question here instead of the tax board:
I am fairly certain I am okay here, but just wanted to be sure:
I assume I am not violating rules by essentially wanting to move a stock from one Roth to another at a different brokerage. I want to sell stock in one Roth account, then buy it immediately in another, different account, separate brokerage. Why? The other one allows for me to add whenever I want to, fractionally, and I want that advantage. (I also plan on taking one that is in the account that allows fractional trading and moving it to the non-fractional account…it will allow me to do the swap without adding money right now, and I don’t care on that one to add to at the moment).
Thanks for checking this question out…
If you want to move a stock, why not just do a broker-to-broker transfer of the shares?
Jonathan is correct - you do not need to sell your old position and open a new position. You can simply transfer the position from one like account to another. Since both accounts are Roth accounts, your new broker should be able to help you complete this seamlessly. This way it is not considered a distribution and you do not have to worry about manually moving the money within a 60 day window.
Who notes some brokers may charge a fee for transferring assets out of your account but some brokers also will pay your transfer fee to bring your assets into their accounts…
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Thanks for the replies, Jonathan and Fuskie. I didn’t know individual positions could be transferred separately, I thought it was whole account or nothing.
However, here is why I would think it would be simpler to perform a sale. I was going to sell stock A and buy stock B immediately at one brokerage, then sell stock B and immediately buy A in another. I wouldn’t be booking a loss (maybe a small - very small - one with one stock) in this case. If there were commissions, I could see asking for a transfer, but with no friction, I figure that would satisfy what I want to do in an easier manner (plus the positions are close in value, so it makes it fortunate; I just have to add a bit more money to one to bring it up to the original position value). And like I say, I enjoy with this other brokerage the ability to add in dollar amounts; with the position I am re-buying in the other one that does not offer this, it is a stock I want to own but am not adding as frequently.
What set this off for me is I remember back in the day with wash-sale confusion over buying/selling stock in a taxable versus non-taxable account…remember how that was a way around a wash? Then the IRS clarified and stopped that practice. I can’t imagine I am violating anything here, or how the two brokerages would know (I don’t operate that way though; I want everything within rules).
Buying and selling the same stock immediately, for the purpose I describe, in accounts that are both Roth, I just can’t see a fault…but, I chatted with one brokerage and the answer was, we won’t stop that trade, but as for tax implications, I would have to check with an expert. I understand that answer, obviously, but it makes me paranoid.
You don’t want to over-think this.
The buy/sell/cost basis applies to taxable accounts. Only SALES at a LOSS in a taxable account can be affected by purchases in a retirement account. (Wash Sale Rules)
When the buy/sell is all in retirement accounts, it does not matter.
Also understand your various Roth accounts are a single IRA. Separate accounts, one IRA.
When/if you do transfer shares from one broker to another, the shares will probably "disappear for a couple of business days.
Mechanically, your current broker will “absorb” your shares into its holdings, possibly transfer shares or cash to the new broker who will “release” shares from their holdings and they magically appear in your account.
You might consider the simplicity of just transferring the account to the other broker. Fewer accounts is better, IMO.
Does that help you?
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Gene, thanks for the reply. That does seem to help…since it has nothing to do with a taxable account, I should be okay.
I am intrigued about transferring shares from one Roth to another…while I may just do the sales in this case, I may want to do some transfers of a couple positions to the brokerage with frac shares…is that a complicated process? From what others have said, I guess not. I like the concept of they are just “absorbed,” seems like it wouldn’t be too bad.
I will consider switching accounts altogether as well. Basically just a legacy account. If everything can be done online, then it would be cool.