IRA Rollover

Archive for November, 2008

Question: 401 in-kind stock rollover to IRA– liquidating? Or get certificates transferred?

I have the option of rolling my stock over by liquidating to cash and repurchasing stock at market close today, or waiting to have the stock certificates tranferred to me to deposit into my new Rollover IRA.

Is there any benefit to one option vs. the other?

I was told that the funds would stay invested in the same stock regardless of how I roll and that with rollover no capital gains issues either way?

Guess I just don’t like the sound of liquidate and repurchase, but since it still is all within the 401-k it should not matter?

I’m leaning toward that option as it sound simple enough?

Answer: you are correct, as long as the investment stays in a Qualified Retirement Plan, there is no worry about a taxable event/capital gains tax. The benefit by not selling and then purchasing would be the possible appreciation you would get. The time it takes to liquidate and then repurchase could mean a possible gain you could miss on the upside. However, if someone tells you to sell and buy the exact same thing, that is a BIG red flag for whoever tells you to do that. That person could lose their investment licenses if their compliance department knows that.

Transfer of Funds to SD — “Trigger” a Distribution of MY Plan?