Can You Transfer Stocks To Your IRA?

Sometimes the question comes up – “Hey, I have this taxable stock account with my favorite stock (or mutual fund, or bond, or CD, or what-have-you).  Can I just transfer the stock over to my IRA as an annual contribution?”

In a word, NO.  Contributions to IRAs are only allowed in cash.  In order to accomplish what the contribution you hoped to, you’d have to liquidate the security holding, paying any tax on capital gains, and then use the cash proceeds to make your contribution.

Keep in mind, this doesn’t apply to rollovers – even the indirect “60-day” rollovers.  You can rollover securities holdings from one IRA (or qualified retirement plan) to another IRA in-kind.  If it’s done indirectly (not a trustee-to-trustee transfer), the same securities must be used with the roll-in.

So, for example, if you had an IRA with $50,000 worth of ABC stock, you could distribute the stock (rather than cashing it out) to a taxable account, and then within 60 days contribute the same stock to another IRA.  During that 60-day period, you could do any number of things, such as collect interest or receive a qualified dividend from the stock, which would be taxed at qualified dividend rates.  As long as you complete the transfer of the exact same stock within the 60-day window, there is no tax owed on the transfer.

Let me point out that I don’t recommend this sort of activity, I’m just explaining that it’s possible.

About the author

Jim Blankenship, CFP®, EA

Jim Blankenship is the founder and principal of Blankenship Financial Planning, Ltd., a financial planning firm providing hourly, as-needed financial planning and advice. A financial services professional for over 25 years, Jim is a CFP professional and has earned the Enrolled Agent designation, a designation that qualifies him as enrolled to practice before the IRS. Jim is also a NAPFA-registered financial advisor, which designates him as a Fee-Only Financial Advisor.

An IRA Owner's Manual
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