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Tax Basis of Roth IRA distribution in kind

My Roth IRA holds only marketable securities -- some with gains and some with losses.

If I close out my Roth IRA by distributing/taking over the securities in kind, what would be the basis of the securities in my hands -- at ROTH's cost basis? OR the FMV on date of transfer to me?

And the holding period for purpose of capital gains/losses when I sell those securities?

NOTE: This is the only retirement a/c I have. No Traditional IRAs. And I am aware of the tax deferral advantage if I don't close it.

Reply to
Not A Clue
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I've distributed IRA contents in-kind and the cost basis is updated by the broker to the day the asset is transferred out.

That said, why do this? Roth has no RMD. It seems to me, one should keep it in their until you need to spend it, in which case, just sell it, and distribute the cash.

Reply to
JoeTaxpayer

If you read between the lines of what JoeTaxpayer told you, distributing stock is no different than distributing the cash. Your basis is what you received (FMV) and your holding period is zero. Your holding period commences on the day of distribution.

Reply to
Alan

The extremely important information missing from your post is, how old are you and when did you open this Roth IRA? If you're 59½ or older, and opened it with funds taxed at least five years ago,(*) then distributions are not taxable and the question of basis does not arise. See PUB 590-B at

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Even if you're not old enough or don't meet the five-year rule, partial distributions may escape tax. See "Ordering rules" in the same publication, at
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(*) A Roth opened with contributions for 2014, even if not opened till 15 April 2015, is more than five years old. If your contributions for 2015 opened the Roth, even as late as 15 April

2016, and you can wait till this coming January to take distributions, they will be fully tax free. Both of those are assuming you're at least 59½ at the time of the distribution.
Reply to
Stan Brown

Thank you to both Joe Taxpayer and Alan.

Reply to
Not A Clue

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