Author Topic: Can I rebalance my Roth IRA holdings without incurring taxes  (Read 775 times)

MikeJones2001

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Can I rebalance my Roth IRA holdings without incurring taxes
« on: November 22, 2021, 02:14:06 PM »
I have about $105,000 in my Roth IRA with Fidelity and it is  98% invested in FSKAX which is their Total US stock market index fund.
I want to rebalance in order to have 10-15%% of my holdings in an International Stock Market Index fund. What is the best way to go about this without having to pay taxes and fees ?

yachi

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Re: Can I rebalance my Roth IRA holdings without incurring taxes
« Reply #1 on: November 22, 2021, 02:49:51 PM »
You can buy and sell to your heart's content in a tax-advantaged account without getting taxed or penalized by the IRS.  I've never heard of any states taking it either, it would be hard to implement.  They only care that the money stays inside the account, if it leaves, it's a taxable event.  For trading fees, click sell on your FSKAS position on Fidelity's site, put in the amount you want to sell, and Fidelity should tell you what it'll cost to sell it (usually like $10 or less) before you confirm.

This is in contrast to investments in a taxable account, where the IRS only cares about the transactions, not whether you keep the money in the account.

MikeJones2001

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Re: Can I rebalance my Roth IRA holdings without incurring taxes
« Reply #2 on: November 22, 2021, 03:10:36 PM »
Yachi,
I appreciate the response. That makes it easy. Ill log on and give it the ole college try

MDM

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Re: Can I rebalance my Roth IRA holdings without incurring taxes
« Reply #3 on: November 24, 2021, 06:38:25 PM »
One oh-by-the-way: transactions in a Roth IRA can cause a wash sale if you are selling "substantially identical" investments at the same time in a taxable account.