Can You Transfer Stock From a Brokerage Account to an IRA?

Can stock held in a taxable brokerage account be transferred into an Individual Retirement Account (IRA)? Understanding the methods and consequences of such transfers is important for optimizing retirement savings and managing potential tax obligations. This guide explores the ways stock can be moved into an IRA, the procedural steps involved, and the associated tax implications.

Ways to Transfer Stock to an IRA

Two primary methods are generally available for moving stock from a taxable brokerage account into an IRA. The choice between these approaches often depends on individual financial circumstances and tax planning goals.

One approach is an “in-kind” transfer, which involves directly moving the actual shares of stock from your taxable brokerage account into your IRA. For an in-kind transfer, the stock’s fair market value (FMV) on the date of transfer is considered the amount contributed to the IRA. This method is typically available for publicly traded securities and requires the receiving IRA custodian to accept the specific stock.

The alternative method involves a “cash contribution,” where you first sell the stock in your taxable brokerage account. This sale converts your shares into cash, realizing any capital gains or losses. The resulting cash proceeds are then contributed to your IRA.

Before proceeding with either method, know the stock’s current market value, its original cost basis, and your available IRA contribution room for the year. Both in-kind and cash contributions count toward your annual IRA contribution limits. These actions are considered contributions to an IRA, distinct from rollovers, which typically involve moving funds between existing retirement accounts.

Initiating and Completing Your Stock Transfer

After choosing a transfer method, the next step is to initiate and complete the transfer. This process requires coordination between your existing brokerage and your IRA custodian.

Contact the IRA custodian where you intend to receive the stock or cash. Many financial institutions facilitate these transfers and can provide the necessary forms and guidance. The receiving institution often initiates the transfer process through the Automated Customer Account Transfer Service (ACATS), which allows for the electronic movement of assets between brokerage firms.

For an in-kind transfer, provide specific details about the stock, including the ticker symbol and number of shares. Your IRA custodian will likely require a recent account statement from your current brokerage account, containing your account number, account type, and current holdings. The type of account from which you are transferring must match the type of account you are transferring to for an in-kind transfer (e.g., a taxable brokerage to a Traditional IRA, not a Roth IRA directly).

If you opt for a cash contribution, sell your stock within your taxable brokerage account first. After the sale settles, you can then initiate an electronic funds transfer, such as an ACH transfer, or mail a check to your IRA custodian. You will be required to fill out specific transfer forms provided by the receiving IRA custodian. These forms typically require your personal information, account numbers, and details of the assets being transferred.

After submitting the required documentation, the transfer process begins. Most ACATS transfers typically take between 3 to 10 business days to complete. Some transfers might take longer, particularly if there are discrepancies in account information or if certain securities are not easily transferable. Monitor the progress of your transfer through both the sending and receiving institutions. During this period, your current brokerage account may temporarily restrict trading activity.

Tax Implications of Stock Transfers to an IRA

Understanding the tax implications is important when transferring stock from a taxable brokerage account to an IRA. The tax consequences can vary significantly depending on the transfer method chosen and the type of IRA receiving the contribution. Careful consideration of these rules helps avoid unexpected tax liabilities.

If you choose to sell stock in your taxable brokerage account and then contribute the cash, any capital gains realized from the sale are taxable in the year the sale occurs. These gains are subject to either short-term or long-term capital gains tax rates, depending on how long you held the stock. Short-term gains, from assets held for one year or less, are taxed at your ordinary income tax rate, while long-term gains, from assets held for more than one year, typically qualify for lower tax rates. After the sale, the cash contribution to your IRA is subject to the annual IRA contribution limits.

For in-kind transfers of stock from a taxable brokerage account to a Traditional IRA, there is generally no immediate taxable event on the transfer itself. The fair market value of the stock on the date of contribution counts towards your annual IRA contribution limit. The original cost basis of the stock generally carries over to the IRA for future tracking, and gains and losses within the IRA grow tax-deferred until distributions are taken in retirement.

Transferring appreciated stock directly in-kind from a taxable brokerage account to a Roth IRA is generally not permitted for contributions. Roth IRA contributions are typically required to be made in cash, except for rollovers from other retirement accounts. If an in-kind transfer from a taxable account were attempted and accepted by a custodian, it would likely be treated as if you sold the stock in your taxable account and then contributed the cash proceeds. This would trigger capital gains taxes on any appreciation in the stock’s value in the year of the transfer, similar to the “sell then contribute cash” method.

Both in-kind and cash contributions must adhere to the annual IRA contribution limits, which for 2025 are $7,000 for individuals under age 50 and $8,000 for those age 50 and older. Exceeding these limits can result in a 6% excise tax on the excess contributions for each year the excess remains in the account. Be aware of the wash sale rule if you sell stock at a loss in your taxable account. If you sell a security at a loss and then purchase a substantially identical security in any of your accounts, including an IRA, within 30 days before or after the sale, the loss is disallowed for tax purposes. This means you cannot claim the tax deduction for that loss.