transfers and taxes

Be sure the transfer occurs "in-kind." That is, the shares of funds move as shares and are no liquidated for any reason. So long as the move is done correctly, no issue, no sale or IRS notification.

One suggestion - before you transfer the funds out, download a complete history of each holding so you know the cost basis of the shares you still own. That won't necessarily transfer over, and can be harder to obtain once you leave a brokerage firm.

-Tad

Tad, that's a great followup. (And, as JT indicated, make sure to tell the custodians to transfer "in kind").

Note a few minor details about this:

1. The custodian is supposed to be keeping track of basis as of the last couple of years, but any positions (or partial positions!) from prior to the rule going into effect are "not covered" and they may or may not have kept track of basis for you.

1. Any covered basis should be transmitted to the new custodian. But it may not go through correctly and it's your responsibility to make sure it's right.

2. Covered or not, whatever basis they report to/for you, it's still your responsibility to make sure it's right, both in general and in particular, when you do taxes on sales.

1. The old custodian certainly should be able to get you old statements and/or confirmations for a while after you transfer away, but they may also charge for digging them up or, in some cases, not even be able to find them. Again, since it's your responsibility, it's especially good to make sure you have the data *before* you move the shares away (as Tad was saying).

and lastly, 5. People very frequently forget to count reinvested distributions when they compute basis. Your basis includes not just your original purchase, but any reinvested distributions count as additional purchaes. Make sure you have statements which include all such distributions. Most equitiy funds do distributions in December, some a couple of times a year, and most bond funds distribute anywhere from quarterly to monthly. This may mean a *lot* of transactions needed to track down and compute your basis even if you only made a single explicit purchase. (Let me tell you about how I just managed basis tracking on a position a client started accumulating with irregularly sized, sometimes monthly purchases -- in the 70s, with reinvested distributions all along the way - ugh!)

Great question!

--David

The proper way to do this is to use an ACATS transfer form filed with the receiving broker.

Be certain to indicate both the symbol and CUSIP number of the funds to be transferred.

There will be no tax consequences for a proper ACATS share transfer.