Can I Transfer In-Kind Assets Into a Roth IRA?

Moving funds from one Roth IRA account to another or converting money in a traditional IRA to a Roth IRA may be a good financial move, and transferring in-kind assets instead of liquidating existing investments so that you can move the cash is allowed by the Internal Revenue Service. There are some IRS rules you have to follow, however.

In-Kind Transfers

An in-kind transfer simply means moving existing investments such as stocks or bonds from one account to another, rather than transferring cash. You can’t contribute to your Roth IRA by making an in-kind transfer of assets because the IRS only allows cash for IRA contributions. You can transfer in-kind assets from other retirement accounts, such as another Roth account, a traditional IRA or a 401(k) plan.

Transfer Types

The IRS allows you to move money into a Roth IRA from other accounts in three ways. With a trustee-to-trustee transfer, you instruct the trustee of a retirement account to send funds to the trustee of your Roth IRA. You tell the trustee how much to transfer and you can instruct him to move securities and other investments in-kind. A same-trustee transfer works the same way except both accounts are with the same financial institution. In a rollover, you withdraw cash from the original account. You have 60 days to deposit the money in your Roth IRA. Rollovers are cash only, so you cannot transfer assets in-kind by this method.


Transfers of assets in-kind don’t produce any tax consequences. In-kind transfers are more convenient because you don’t have to sell off assets to move the money. You can keep investments intact that you aren’t ready to liquidate. In addition, you do not have to pay broker’s commissions or other fees to sell off assets and then repurchase them following the transfer. Your account providers may charge fees for making the transfer.

Taxes and Transfers

When you only move assets from one of your Roth IRA accounts to another, there are no tax issues. However, when you move money from a traditional IRA or other tax-deferred retirement account, you must “convert” pretax dollars into after-tax dollars by paying income taxes on the value of the assets you move. All of the money is supposed to go into the Roth account. If you pull money out of the IRA to pay the taxes and you are under age 59 1/2, the withdrawn funds count as an early withdrawal and may be subject to a 10-percent penalty tax. In addition, you might have to sell off assets you transfer in-kind so you can withdraw the cash. You can avoid these problems by using money that is not part of your IRA or other retirement accounts to pay the taxes.

About the Author

Based in Atlanta, Georgia, W D Adkins has been writing professionally since 2008. He writes about business, personal finance and careers. Adkins holds master's degrees in history and sociology from Georgia State University. He became a member of the Society of Professional Journalists in 2009.

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