 In Kind IRA Distribution to Taxable Account |
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 May 14 2009, 01:18 PM
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#1
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Registered User Group: Registered Posts: 2 Joined: 10-March 07 Member No.: 18,457  |
When an IRA distribution is taken "in kind" and the shares are sent to a taxable account the cost basis on the shares in the taxable acount is the fair market value (FMV) on the distribution date. Could anyone tell me where I can find this in print i.e. IRS Pub or Reg?
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May 14 2009, 09:41 PM
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#2
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Registered User Group: Registered Posts: 2,138 Joined: 23-July 06 Member No.: 16,532 |
Don't know of a cite. But you gain basis from the fact that the distribution results in taxable income to the IRA owner in the amount of the fair market value of the shares, and by reason of paying the tax on that amount, you have tax basis in that amount.
-------------------- John Simmons
jsimmons@ida.net Note to Readers: For you, I'm a stranger posting on a bulletin board. Posts here should not be given the same weight as personalized advice from a professional who knows or can learn all the facts of your situation. |
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May 15 2009, 09:54 AM
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#3
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Registered User Group: Registered Posts: 893 Joined: 17-May 05 Member No.: 14,641 |
It's definitional of the tax basis of an asset. See what John said above. It's semi-analogous to a partnership, where a partner pays tax on income that's not distributed, resulting in an increase in basis.
(edited to remove the part that John had said just as well as I ended up with). This post has been edited by masteff: May 15 2009, 09:58 AM -------------------- "He attacked everything in life with a mix of extraordinary genius and naive incompetence, and it was often difficult to tell which was which." - Douglas Adams (last updated: 10/12/09)
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| Lo-Fi Version | Time is now: 21st November 2009 - 01:45 AM |