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ROTH IRA contribution
Old 03-28-2016, 03:33 PM   #1
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ROTH IRA contribution

Does anyone know if it is possible/legal to contribute to an (existing) ROTH IRA account by doing an "in kind transfer" of equities from an after-tax brokerage account to the ROTH IRA account? I'd like to not have to liquidate the assets (and so have that tax hit) in order to to max out my ROTH IRA contribution this year.
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Old 03-28-2016, 04:10 PM   #2
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I think you should be able to do this. Contact your IRA account firm and get the details from them.
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Old 03-28-2016, 04:23 PM   #3
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Sorry, not legal. You want to avoid the capital gains tax by not selling. Not possible.

If it was possible, I would have been doing this for years and years.

But donate that position to charity instead if it has been held long-term. Get the tax deduction (if you itemize) and avoid long-term cap gains taxes.
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Old 03-28-2016, 07:21 PM   #4
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I have some stocks in a taxable account. Can I use them to fund my Roth IRA instead of using cash? | Investopedia

I think you can do it going the other way (distribution in kind from IRA to taxable) but not the way you wish.

You can do a conversion from a TIRA to a Roth in kind
(a conversion contribution) but not an "original" contribution which needs to be cash.
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Old 03-28-2016, 09:52 PM   #5
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Quote:
Originally Posted by LOL! View Post
Sorry, not legal. You want to avoid the capital gains tax by not selling. Not possible.

If it was possible, I would have been doing this for years and years.

But donate that position to charity instead if it has been held long-term. Get the tax deduction (if you itemize) and avoid long-term cap gains taxes.
Could you explain this? There's no cap gains tax for tax deferred holdings. I assume you wound have to pay ordinary income tax on the value and you could have the identical stocks in the Roth, but not sure if this could be done without selling.



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Old 03-28-2016, 10:08 PM   #6
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Could you explain this? There's no cap gains tax for tax deferred holdings. I assume you wound have to pay ordinary income tax on the value and you could have the identical stocks in the Roth, but not sure if this could be done without selling.



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Never mind. I mis-read OP.


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Old 03-29-2016, 12:10 AM   #7
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Nope,

Just think, I have a stock I bought for $1 now its worth $100,000.
If I could transfer it in kind to my Roth IRA, then once it was in there, I could sell it all tax free !

Nobody would ever have capital gains, so no it's not allowed.
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