I have shares of a more tax efficient fund in my IRA and shares of a less tax efficient fund in my taxable account.  I want to switch them so that the the more tax efficient shares are in the taxable account.  How do I do this?

Not sure why I am responding since I am only guessing, but AF board needs the traffic, so what the heck!

I would imagine you need to rollover the IRA, or you should be able to do an exchange if its within the same fund family or brokerage.

In taxable, I assume you need to sell and then buy the new fund.

Again, only assuming and guessing here, so I have probably been next to useless!

Brian

You may only make cash contributions to retirement plans, including IRA's. So you'd have to sell the shares in your IRA and from the cash produced, purchase the shares you'd want to hold there.

In your taxable account, you're free to buy and sell shares of any security as you see fit.

The only other caustion is watch for wash sales. The IRS has ruled that if you sell shares in a taxable account at a loss and then repurchase the same shares in a tax deferred account, such as an IRA within 30 days (before or after), then you would run afoul of the wash sale rules and would not be able to take the loss on your taxable accounts.

 BruceM

You may only make cash contributions to retirement plans, including IRA's. So you'd have to sell the shares in your IRA and from the cash produced, purchase the shares you'd want to hold there.

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Hi Bruce,

I understand that you can not transfer taxable investments into an IRA, thats clear.

What your saying above is the same as an exchange within the same IRA, within the same fund family?  Furthermore, what your saying above is the same thing as rolling an existing IRA to another institution.  Correct?

Thanks

Brian

You may only make cash contributions to retirement plans, including IRA's. So you'd have to sell the shares in your IRA and from the cash produced, purchase the shares you'd want to hold there.

In your taxable account, you're free to buy and sell shares of any security as you see fit.

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Do you know if American Funds will let me sell/buy these without the load?  I wouldn't be buying any more shares, just trying to get the more tax inefficient shares in my IRA.

[quote user="hurleyhuckster"]If your staying in the family, you can exchange like share classes, without paying the load.[/quote]

OK, so is that how I do it - through an exchange of shares?

Brian

Depending on the brokerage or custodian, you should be able to simply transfer securities in-kind between retirement accounts, assuming they are transferrable. For example, proprietary MF's offered by Insurance companies would not be.

Sometimes within a brokerage or a fund family they will do a 'deemed' sale, where it looks like shares of a stock or MF have been transferred from a taxable account to your IRA...usually to avoid transaction costs. However, the IRS will consider it to be a sale.

BruceM