Transferring from TRPrice to Fido Tax Consequences

[marko]

My portfolio is about 70% in my IRA and 30% in after tax accounts; all at TRPrice. ( I do have some accounts at Fido already but that's another story)

I know that I can transfer my IRA from Price to Fido with no tax hit.

What I'm wondering is how does it work with my after tax account where it consists 100% of Price specific MF funds (funds of funds). Fido has similar funds but they're not the same ticker-wise so it's not an exact one-for-one transfer.

Would I have to liquidate them, take a cap gains hit and then purchase new funds or is there a way to do it without getting whacked?

[MichaelB]

Quote:

Originally Posted by marko My portfolio is about 70% in my IRA and 30% in after tax accounts; all at TRPrice. ( I do have some accounts at Fido already but that's another story) I know that I can transfer my IRA from Price to Fido with no tax hit. What I'm wondering is how does it work with my after tax account where it consists 100% of Price specific MF funds (funds of funds). Fido has similar funds but they're not the same ticker-wise so it's not an exact one-for-one transfer. Would I have to liquidate them, take a cap gains hit and then purchase new funds or is there a way to do it without getting whacked?

The only way to avoid a tax hist is a “transfer in kind” of the holdings in the taxable account. Check first to see if the mutual funds are available on Fidelity. If so, a transfer should be simple. If those funds aren’t available they will be liquidated and you have lots of capital gains.

[marko]

Quote:

Originally Posted by MichaelB The only way to avoid a tax hist is a “transfer in kind” of the holdings in the taxable account. Check first to see if the mutual funds are available on Fidelity. If so, a transfer should be simple. If those funds aren’t available they will be liquidated and you have lots of capital gains.

That's what I feared. So for example, while Fido has a retirement 2020 fund it is called "Freedom 2020" and not the same as Price's "Retirement 2020" fund.

[Aerides]

If the existing funds are proprietary and FIDO can't transfer them, they will let you know. But it's worth a chat now with a FIDO rep. Some they can still manage, some they can't. Just because they don't have the same product doesn't always mean they can't move it tax-free.

[GrayHare]

Price funds can be held in a Fidelity account, provided those funds are not proprietary. If you purchased those Price funds yourself, rather than had them purchased for you within a 401k, most likely you can xfer them in kind to Fidelity with no need to liquidate.

[marko]

Thanks all!! I'll look into it with Fidelity. Good info
Im not sure how a proprietary fund is defined but I'll figure it out.

[OldShooter]

Quote:

Originally Posted by marko ... Im not sure how a proprietary fund is defined but I'll figure it out.

It's defined as a fund that is designed to lock customers into a brokerage house.

[Aerides]

For example, Fidelity can trade/hold/buy many vanguard funds, like VTSAX. But not their Admiral funds. TRP seems to have more proprietary than others.

[VanWinkle]

Quote:

Originally Posted by OldShooter It's defined as a fund that is designed to lock customers into a brokerage house.

^^^^^^This

Great description OldShooter.....
BTW, my 96 year old uncle(World War II vet on Iwo Jima) still shoots
trap 3 days a week and has many victories to his credit. Not many
competitors in his brkt as of late.......

VW

[OldShooter]

Quote:

Originally Posted by Aerides For example, Fidelity can trade/hold/buy many vanguard funds, like VTSAX. But not their Admiral funds. ...

That may be outdated information. After VG eliminated their "Investor" share class they moved everyone to "Admiral," at least at Schwab. Now we can buy/sell Admiral class funds, no problem.

My guess is that the same thing happened at Fido.

[CRLLS]

The possible upside of having to pay taxes on any gains in the taxable account is it will set a new basis in the new account, right?

[MRG]

Quote:

Originally Posted by marko Thanks all!! I'll look into it with Fidelity. Good info Im not sure how a proprietary fund is defined but I'll figure it out.

My understanding is if it's NTF or no fee it's not proprietary.

[Kabowest]

I will moving funds to Fidelity within the next few weeks and have been researching this is exact concern. From what I am told by Fidelity is that they do ACATS transfer. They state they can move most, if not all, one-for-one or like-for-like without liquidating current positions.

https://www.investopedia.com/terms/a/acat.asp

[marko]

Quote:

Originally Posted by CRLLS The possible upside of having to pay taxes on any gains in the taxable account is it will set a new basis in the new account, right?

Yeah. But I've held some of these funds for 20-30 years or so. And I'm already in the upper echelons income-wise. I'd get killed by CGs!! (That's why I'm asking)

The downside of being a 'buy and hold' investor who only spends the dividends I guess, but a nice 'rich man's problem' I suppose.

[Exchme]

If you've held that long, it may not be worth it to switch the taxable funds. Certainly the IRA is an easy call and will at least help get your costs down.

In taxable, turn off dividend reinvestment and withdraw the dividends as they come. See if you can switch to SpecID to identify the tax basis on each lot, you may have some of the taxable that can be liberated without too much cost.

[kgtest]

DF is also moving out of T rowe price. Every time he's contacted them this year to do anything its been multiple hours on the phone.

They even screwed up his in-kind transfer to Vanguard he tried to do last week after spending three hours on the phone, nothing was done/executed. Such sad customer service.

[BobMW]

Wonder same thing but with Vanguard ETFs bought at Steifel in the March 20 dip using Municipal bonds I'd held there but were sure to get cashed out soon. Now that I'm close to retirement thinking of consolidating holdings away from Steifel (taxable) and AIG (401k)

[Exchme]

Quote:

Originally Posted by kgtest DF is also moving out of T rowe price. Every time he's contacted them this year to do anything its been multiple hours on the phone. They even screwed up his in-kind transfer to Vanguard he tried to do last week after spending three hours on the phone, nothing was done/executed. Such sad customer service.

You say that like you think it was accidental, there's another possibility...