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IRA Distribution taken as stock and added to a non-IRA investment account

Leon Pink

Hi All, I recently took a RMD "In Kind" and transferred the shares into my investment account. I am beginning my Tax Planning process and noticed this distribution does not appear as a RMD Distribution when running Itemized Categories. What is the correct way to input this distribution, on both sides, into Quicken?

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Rocket J Squirrel

Sell in the IRA, deposit the cash in the receiving account, and buy the shares at the same price.

Leon Pink

Won't doing that cause the original shares to become short term versus long term as they were in the IRA account?

Rocket J Squirrel

Yes.

After distribution of a security (known as an "in kind distribution"), the value of the security at the time of distribution becomes the cost basis in the taxable brokerage account. The holding period also starts on the day after the date of distribution. If those shares are sold in the first year, any value in excess of the value upon distribution will be taxable as a short term gain. If sold over a year later, any gain will be a long term cap gain.

https://www.irahelp.com/forum-post/62205-it-taxable-event-when-you-transfer-stock-ira-taxable-account-kind-distribution

Leon Pink

Perfect.

Okay how can I set the Category to show it as a distribution? When entering those transactions there wasn't a way to select a Category. Thus, it doesn't appear as a distribution when I run an Income Report.

Thanks again!

Rocket J Squirrel

Some previous discussions...

Start with this one:

https://community.quicken.com/discussion/7072150/faq-best-way-to-handle-distributions-from-ira

And also see this one:

https://community.quicken.com/discussion/7185138/faq-how-to-do-an-ira-distribution-as-a-transfer-of-stock

Rocket J Squirrel

Did those faqs answer your questions, @Leon Pink? If not, feel free to follow up with more!