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

A Roth IRA allows you to pay taxes on your income at today’s rates so that the money can grow tax-free to help you save for retirement. The benefits are especially appealing if you’re in a lower tax bracket today than you expect to be in when you take distributions. Contributions to your Roth IRA must be made in cash, not through in-kind, or "as is" contributions. But if want to roll money into a Roth IRA from another account, you can still transfer those assets.


Contributions to a Roth IRA can only be made in cash, and cannot consist of in-kind assets.

Assessing Annual Contributions

Your annual contributions to a Roth IRA must be made in cash even if the fair market value of the asset you want to transfer is readily available. For example, even if you own stock that is publicly traded and has a readily ascertainable fair market value, you must first sell the stock and then deposit the proceeds of the sale into your Roth IRA.

Selling Assets to Generate Cash

When you sell assets, you may generate a taxable gain or loss from the transaction. If your sales proceeds are more than your basis, which is typically what you paid for the asset, you have a taxable gain. If the proceeds are less than your basis, you have a loss. For example, say you purchased stock for $100 and then you sell it for $120. You generate a $20 taxable gain that you must include on your tax return. Therefore, if you sell assets to generate cash for your Roth IRA contribution, make sure you have enough money set aside for the taxes.

Exploring Rollover Exceptions

If you are rolling over money from another qualified retirement plan into a Roth IRA, you can transfer in-kind assets to your Roth IRA. The IRS allows you to convert money from other retirement plans, including 401(k) plans, 403(b) plans, traditional IRAs, SEP IRAs and other Roth IRAs. For example, if you own 1,000 shares of stock in your traditional IRA and you’re converting to a Roth IRA, you can move the 1,000 shares of stock directly from the traditional IRA directly into the Roth IRA.

If you are converting assets from a tax-deferred retirement account, such as a traditional 401(k), traditional 403(b) or traditional IRA, you must include the amount of the conversion as part of your taxable income for the year of the conversion. For example, if you roll $10,000 from your traditional IRA to your Roth IRA, you must pay income taxes on $10,000 that year. However, when you take qualified distributions from the account in retirement, you won’t have to pay any taxes on the distributions.