Move from Fidelity Brokerage to IRA without one day lag/fluctuation?

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Topic Author
DrTobiasFunke
Posts: 5
Joined: Tue Sep 28, 2021 9:24 am

Move from Fidelity Brokerage to IRA without one day lag/fluctuation?

Post by DrTobiasFunke »

First off, I am not trying to avoid taxes on the brokerage account.

I have $6,500 FZROX in a brokerage account. I want to transfer the amount to Fidelity IRA.

As I understand it, I have to sell it in the brokerage on Day 1 COB, and buy it in the IRA on Day 2 COB.

Is there any way to do this without the one day lag time and potential gain/loss on that lag?
Yoshida26
Posts: 17
Joined: Mon Jul 18, 2022 9:29 pm

Re: Move from Fidelity Brokerage to IRA without one day lag/fluctuation?

Post by Yoshida26 »

FZROX will only sell after the market closes so you wont be able to make another purchase until the next day after the market opens. If you are purchasing FZROX then it wont buy until after the market closes, therefore you have that 1 day lag. The move to the IRA happens instantly once you hit the transfer button.
Tramper Al
Posts: 3649
Joined: Thu Oct 18, 2007 11:42 am

Re: Move from Fidelity Brokerage to IRA without one day lag/fluctuation?

Post by Tramper Al »

You could always just transfer $6500 cash (assuming available) into the Roth. Then, simultaneously sell the position in taxable while you buy it in the Roth, so no change in market exposure, no missing out.

However, selling in taxable will either 1) result in a taxable capitol gain - do you want that? or 2) result in a harvested taxable loss - but will run you into wash rules if you buy the same security in the Roth within 30 days before/after. In that case it is usually preferable to identify a different security/instrument that you judge quite comparable, just not identical.
single2019
Posts: 131
Joined: Thu May 27, 2021 12:13 pm

Re: Move from Fidelity Brokerage to IRA without one day lag/fluctuation?

Post by single2019 »

DrTobiasFunke wrote: Sun Jan 22, 2023 7:51 am First off, I am not trying to avoid taxes on the brokerage account.

I have $6,500 FZROX in a brokerage account. I want to transfer the amount to Fidelity IRA.

As I understand it, I have to sell it in the brokerage on Day 1 COB, and buy it in the IRA on Day 2 COB.

Is there any way to do this without the one day lag time and potential gain/loss on that lag?
Deleted
Last edited by single2019 on Mon Jan 23, 2023 3:40 pm, edited 1 time in total.
nalor511
Posts: 3609
Joined: Mon Jul 27, 2015 1:00 am

Re: Move from Fidelity Brokerage to IRA without one day lag/fluctuation?

Post by nalor511 »

single2019 wrote: Sun Jan 22, 2023 8:12 pm
DrTobiasFunke wrote: Sun Jan 22, 2023 7:51 am First off, I am not trying to avoid taxes on the brokerage account.

I have $6,500 FZROX in a brokerage account. I want to transfer the amount to Fidelity IRA.

As I understand it, I have to sell it in the brokerage on Day 1 COB, and buy it in the IRA on Day 2 COB.

Is there any way to do this without the one day lag time and potential gain/loss on that lag?
In-kind transfer
You cannot contribute to an IRa in kind. What you can do is put in the sell order, and call or live chat to ask if they will make an exception to let you do your contribution the same day so you are not out of the market. Or you could temporarily transfer in cash from the bank (which will let you buy same day), and transfer the sale proceeds back out a few days later
2pedals
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Joined: Wed Dec 31, 2014 11:31 am

Re: Move from Fidelity Brokerage to IRA without one day lag/fluctuation?

Post by 2pedals »

If you have liquid emergency funds you can buy the IRA and sell the taxable account to replenish the ER funds the same day.
TropikThunder
Posts: 3797
Joined: Sun Apr 03, 2016 5:41 pm

Re: Move from Fidelity Brokerage to IRA without one day lag/fluctuation?

Post by TropikThunder »

DrTobiasFunke wrote: Sun Jan 22, 2023 7:51 am First off, I am not trying to avoid taxes on the brokerage account.

I have $6,500 FZROX in a brokerage account. I want to transfer the amount to Fidelity IRA.

As I understand it, I have to sell it in the brokerage on Day 1 COB, and buy it in the IRA on Day 2 COB.

Is there any way to do this without the one day lag time and potential gain/loss on that lag?
At Vanguard you can do it as an exchange (sell from taxable and buy in IRA at the same time). It’s still a separate buy and sell but it happens the same day. I don’t know if it works that way at Fidelity.
single2019
Posts: 131
Joined: Thu May 27, 2021 12:13 pm

Re: Move from Fidelity Brokerage to IRA without one day lag/fluctuation?

Post by single2019 »

nalor511 wrote: Sun Jan 22, 2023 8:46 pm
single2019 wrote: Sun Jan 22, 2023 8:12 pm
DrTobiasFunke wrote: Sun Jan 22, 2023 7:51 am First off, I am not trying to avoid taxes on the brokerage account.

I have $6,500 FZROX in a brokerage account. I want to transfer the amount to Fidelity IRA.

As I understand it, I have to sell it in the brokerage on Day 1 COB, and buy it in the IRA on Day 2 COB.

Is there any way to do this without the one day lag time and potential gain/loss on that lag?
In-kind transfer
You cannot contribute to an IRa in kind. What you can do is put in the sell order, and call or live chat to ask if they will make an exception to let you do your contribution the same day so you are not out of the market. Or you could temporarily transfer in cash from the bank (which will let you buy same day), and transfer the sale proceeds back out a few days later
Thanks for the correction
single2019
Posts: 131
Joined: Thu May 27, 2021 12:13 pm

Re: Move from Fidelity Brokerage to IRA without one day lag/fluctuation?

Post by single2019 »

single2019 wrote: Sun Jan 22, 2023 8:12 pm
DrTobiasFunke wrote: Sun Jan 22, 2023 7:51 am First off, I am not trying to avoid taxes on the brokerage account.

I have $6,500 FZROX in a brokerage account. I want to transfer the amount to Fidelity IRA.

As I understand it, I have to sell it in the brokerage on Day 1 COB, and buy it in the IRA on Day 2 COB.

Is there any way to do this without the one day lag time and potential gain/loss on that lag?
Deleted
toddthebod
Posts: 1176
Joined: Wed May 18, 2022 12:42 pm

Re: Move from Fidelity Brokerage to IRA without one day lag/fluctuation?

Post by toddthebod »

TropikThunder wrote: Sun Jan 22, 2023 11:50 pm
DrTobiasFunke wrote: Sun Jan 22, 2023 7:51 am First off, I am not trying to avoid taxes on the brokerage account.

I have $6,500 FZROX in a brokerage account. I want to transfer the amount to Fidelity IRA.

As I understand it, I have to sell it in the brokerage on Day 1 COB, and buy it in the IRA on Day 2 COB.

Is there any way to do this without the one day lag time and potential gain/loss on that lag?
At Vanguard you can do it as an exchange (sell from taxable and buy in IRA at the same time). It’s still a separate buy and sell but it happens the same day. I don’t know if it works that way at Fidelity.
Can you do that if you don't have the cash in the IRA already? Like, can you sell, make an IRA contribution with those proceeds, and buy the same day?
Backtests without cash flows are meaningless. Returns without dividends are lies.
Hyperchicken
Posts: 1432
Joined: Mon Mar 02, 2020 4:33 pm

Re: Move from Fidelity Brokerage to IRA without one day lag/fluctuation?

Post by Hyperchicken »

DrTobiasFunke wrote: Sun Jan 22, 2023 7:51 am First off, I am not trying to avoid taxes on the brokerage account.
[...]
Why not? Tax avoidance is legal and is something everyone should rationally be doing.
nalor511
Posts: 3609
Joined: Mon Jul 27, 2015 1:00 am

Re: Move from Fidelity Brokerage to IRA without one day lag/fluctuation?

Post by nalor511 »

Hyperchicken wrote: Mon Jan 23, 2023 4:27 pm
DrTobiasFunke wrote: Sun Jan 22, 2023 7:51 am First off, I am not trying to avoid taxes on the brokerage account.
[...]
Why not? Tax avoidance is legal and is something everyone should rationally be doing.
Because you can't transfer in kind to an IRA
Hyperchicken
Posts: 1432
Joined: Mon Mar 02, 2020 4:33 pm

Re: Move from Fidelity Brokerage to IRA without one day lag/fluctuation?

Post by Hyperchicken »

nalor511 wrote: Mon Jan 23, 2023 4:36 pm
Hyperchicken wrote: Mon Jan 23, 2023 4:27 pm
DrTobiasFunke wrote: Sun Jan 22, 2023 7:51 am First off, I am not trying to avoid taxes on the brokerage account.
[...]
Why not? Tax avoidance is legal and is something everyone should rationally be doing.
Because you can't transfer in kind to an IRA
Not a reason not to look for ways to legally avoid taxes. That does not mean one will always succeed. But looking for opportunities is important.
Topic Author
DrTobiasFunke
Posts: 5
Joined: Tue Sep 28, 2021 9:24 am

Re: Move from Fidelity Brokerage to IRA without one day lag/fluctuation?

Post by DrTobiasFunke »

Tramper Al wrote: Sun Jan 22, 2023 12:58 pm You could always just transfer $6500 cash (assuming available) into the Roth. Then, simultaneously sell the position in taxable while you buy it in the Roth, so no change in market exposure, no missing out.

However, selling in taxable will either 1) result in a taxable capitol gain - do you want that? or 2) result in a harvested taxable loss - but will run you into wash rules if you buy the same security in the Roth within 30 days before/after. In that case it is usually preferable to identify a different security/instrument that you judge quite comparable, just not identical.
Thanks. This is what I was looking for and seems so obvious in hindsight.
TropikThunder
Posts: 3797
Joined: Sun Apr 03, 2016 5:41 pm

Re: Move from Fidelity Brokerage to IRA without one day lag/fluctuation?

Post by TropikThunder »

toddthebod wrote: Mon Jan 23, 2023 4:25 pm
TropikThunder wrote: Sun Jan 22, 2023 11:50 pm At Vanguard you can do it as an exchange (sell from taxable and buy in IRA at the same time). It’s still a separate buy and sell but it happens the same day. I don’t know if it works that way at Fidelity.
Can you do that if you don't have the cash in the IRA already? Like, can you sell, make an IRA contribution with those proceeds, and buy the same day?
Yeah, I’ve done it that way the last couple years. You use the standard “Where is the money coming from?” And “Where is the money going?” screens, select the brokerage and fund you’re selling as the source, then select the IRA and fund you’re buying with the contribution. Then after market close the brokerage sale, transfer, and IRA fund purchase are all processed. The brokerage sale is still a taxable event, but it avoids being out of the market.
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