Rollover of Stocks to IRA account
A block of stock distributed to a cash brokerage account as part of a RMD. The Cares Act allows this distribution to be Rolled-over to the IRA account. The brokerage firm re-enters the block of stock with the original acquisition date and cost but does not show the cash value in Dollars to equal the distribution value. Is this a proper procedure?
Permalink Submitted by Alan - IRA critic on Wed, 2020-09-16 20:58
Sounds like this was a pre 8/31 return of a would be RMD to the distributing IRA account. The brokerage must confirm that the number of shares of all holdings were returned. Value is immaterial as is any gain or loss on these shares while no longer in the IRA. No gain or loss is reported for the taxable brokerage account. Form 5498 instuctions state that the rollover contribution value shown on the 5498 should be the current value of these shares, whether more or less than the value at distribution. The taxpayer should probably include an explanatory statement with their tax return indicating the number of shares of each holding distributed and returned so the IRS will understand the transaction. Not sure how the original cost and acquisition date matters for IRA holdings other than gain/loss reports tracking investor’s performance.