Author Topic: Tax loss harvesting using early IRA transfer  (Read 560 times)

ChpBstrd

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Tax loss harvesting using early IRA transfer
« on: April 05, 2018, 07:55:09 AM »
I have a speculative options investment worth about $1k now that has lost about $7k in value. It's in a rollover IRA, so if I sell I will not harvest the tax loss.

Is it possible/allowed to take an early distribution (pay the 10% penalty plus income tax) by transferring these options to my taxable account and then selling the investment in my taxable account to harvest the tax loss? Or would my cost basis in the taxable account be reset to $1k upon the transfer?

I doubt this is possible, as it would be a helluva loophole, but it's worth asking.

terran

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Re: Tax loss harvesting using early IRA transfer
« Reply #1 on: April 05, 2018, 10:11:38 AM »
You can't transfer in kind in/out of an IRA (except to/from another IRA), so you would have to sell and transfer the cash. So no, this won't work.