Withdraw 0.13 from IRA, taxable?

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nalor511
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Withdraw 0.13 from IRA, taxable?

Post by nalor511 »

Seems like the answer should be "13 cents rounds down to 0, so no tax impact" but I wanted to check with the experts. I have 13 cents in cash inside a Traditional IRA and it's annoying me. It's too small, fidelity won't let me buy into my existing ETF holding. Can I just withdraw the 13 cents to my brokerage and then to my bank, since the 13 cent withdrawal rounds down to 0 for IRS purposes, or is there a gotcha that I'm missing? I'm under 59. Thanks!
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whodidntante
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Re: Withdraw 0.13 from IRA, taxable?

Post by whodidntante »

Are you saying that you haven't been withdrawing 49 cents per year tax and penalty-free? :twisted:
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nalor511
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Re: Withdraw 0.13 from IRA, taxable?

Post by nalor511 »

whodidntante wrote: Wed Oct 13, 2021 6:01 pm Are you saying that you haven't been withdrawing 49 cents per year tax and penalty-free? :twisted:
Yes, correct I have never done that. I have done xxxx.49 from an HSA tho, and the 49 cents did of course round down. Just want to make sure I am not missing something IRA specific before I get this cash turd out of my sight :P
pizzy
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Re: Withdraw 0.13 from IRA, taxable?

Post by pizzy »

Fidelity allows fractional ETF shares.
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whodidntante
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Re: Withdraw 0.13 from IRA, taxable?

Post by whodidntante »

Mock tax return!

No, don't make fun of your tax return. Boot up the ol' TurboTax or whatever you used last year, and play pretend like you got a 1099 whatever with 13 cents on it!

You can then speculate that it's going to be a similar answer in the next year. That's how I self-help myself for a lot of tax questions I have.
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nalor511
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Re: Withdraw 0.13 from IRA, taxable?

Post by nalor511 »

pizzy wrote: Wed Oct 13, 2021 6:32 pm Fidelity allows fractional ETF shares.
Not for under a dollar they do not. Go ahead, try.
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nalor511
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Re: Withdraw 0.13 from IRA, taxable?

Post by nalor511 »

whodidntante wrote: Wed Oct 13, 2021 6:39 pm Mock tax return!

No, don't make fun of your tax return. Boot up the ol' TurboTax or whatever you used last year, and play pretend like you got a 1099 whatever with 13 cents on it!

You can then speculate that it's going to be a similar answer in the next year. That's how I self-help myself for a lot of tax questions I have.
This is always good advice. I didn't want to dig out that special computer for 13 cents :twisted: in the event someone knew the answer
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Stinky
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Re: Withdraw 0.13 from IRA, taxable?

Post by Stinky »

Sell one share of your ETF. Let’s say it’s $10.00.

Then add your $0.13 to it, and buy back $10.13 of the same ETF.

Problem solved!
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nalor511
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Re: Withdraw 0.13 from IRA, taxable?

Post by nalor511 »

Stinky wrote: Wed Oct 13, 2021 7:20 pm Sell one share of your ETF. Let’s say it’s $10.00.

Then add your $0.13 to it, and buy back $10.13 of the same ETF.

Problem solved!
Last time I did it that way, and they gave me another penny in interest the next day!
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whodidntante
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Re: Withdraw 0.13 from IRA, taxable?

Post by whodidntante »

nalor511 wrote: Wed Oct 13, 2021 7:57 pm
Stinky wrote: Wed Oct 13, 2021 7:20 pm Sell one share of your ETF. Let’s say it’s $10.00.

Then add your $0.13 to it, and buy back $10.13 of the same ETF.

Problem solved!
Last time I did it that way, and they gave me another penny in interest the next day!
I do not like it in the hay!
DSInvestor
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Re: Withdraw 0.13 from IRA, taxable?

Post by DSInvestor »

If you have a Roth IRA, you can do a Roth conversion.
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nalor511
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Re: Withdraw 0.13 from IRA, taxable?

Post by nalor511 »

DSInvestor wrote: Wed Oct 13, 2021 8:02 pm If you have a Roth IRA, you can do a Roth conversion.
Then I still have the 0.13 staring at me in the Roth. Silly I know
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Re: Withdraw 0.13 from IRA, taxable?

Post by DSInvestor »

nalor511 wrote: Wed Oct 13, 2021 8:06 pm
DSInvestor wrote: Wed Oct 13, 2021 8:02 pm If you have a Roth IRA, you can do a Roth conversion.
Then I still have the 0.13 staring at me in the Roth. Silly I know
If you have other holdings in the Roth IRA, collect the dividends from those other holdings and then use the dividends and $0.13 to make your next purchase. The same thing would work in your Traditional IRA account if you hold other things there. Some folks have empty Traditional IRA accounts because they use the account as a conduit for the backdoor into Roth IRA.
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Gill
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Re: Withdraw 0.13 from IRA, taxable?

Post by Gill »

You can’t round down the single income item and must report it as 13 cents. If the total of that income category is 13 cents or up to 49 cents it can then be rounded down
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sycamore
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Re: Withdraw 0.13 from IRA, taxable?

Post by sycamore »

whodidntante wrote: Wed Oct 13, 2021 7:59 pm
nalor511 wrote: Wed Oct 13, 2021 7:57 pm
Stinky wrote: Wed Oct 13, 2021 7:20 pm Sell one share of your ETF. Let’s say it’s $10.00.

Then add your $0.13 to it, and buy back $10.13 of the same ETF.

Problem solved!
Last time I did it that way, and they gave me another penny in interest the next day!
I do not like it in the hay!
No more rhymes now I mean it...
secondcor521
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Re: Withdraw 0.13 from IRA, taxable?

Post by secondcor521 »

sycamore wrote: Wed Oct 13, 2021 8:33 pm
whodidntante wrote: Wed Oct 13, 2021 7:59 pm
nalor511 wrote: Wed Oct 13, 2021 7:57 pm
Stinky wrote: Wed Oct 13, 2021 7:20 pm Sell one share of your ETF. Let’s say it’s $10.00.

Then add your $0.13 to it, and buy back $10.13 of the same ETF.

Problem solved!
Last time I did it that way, and they gave me another penny in interest the next day!
I do not like it in the hay!
No more rhymes now I mean it...
Anybody want a peanut?
tomsense76
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Re: Withdraw 0.13 from IRA, taxable?

Post by tomsense76 »

Just buy a mutual fund. Normally I buy one of the Fidelity Zero mutual funds with loose change like this. There are no minimums.

https://www.fidelity.com/mutual-funds/i ... ndex-funds
"Anyone who claims to understand quantum theory is either lying or crazy" -- Richard Feynman
Topic Author
nalor511
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Re: Withdraw 0.13 from IRA, taxable?

Post by nalor511 »

tomsense76 wrote: Wed Oct 13, 2021 9:21 pm Just buy a mutual fund. Normally I buy one of the Fidelity Zero mutual funds with loose change like this. There are no minimums.

https://www.fidelity.com/mutual-funds/i ... ndex-funds
That's a great idea, thank ya. I'd do that but then I can never transfer it if Fidelity bites me.

Sounds like it can probably be rounded down successfully, I'll do a mock return tomorrow and see. Thanks all!
tomsense76
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Re: Withdraw 0.13 from IRA, taxable?

Post by tomsense76 »

nalor511 wrote: Thu Oct 14, 2021 2:14 am
tomsense76 wrote: Wed Oct 13, 2021 9:21 pm Just buy a mutual fund. Normally I buy one of the Fidelity Zero mutual funds with loose change like this. There are no minimums.

https://www.fidelity.com/mutual-funds/i ... ndex-funds
That's a great idea, thank ya. I'd do that but then I can never transfer it if Fidelity bites me.

Sounds like it can probably be rounded down successfully, I'll do a mock return tomorrow and see. Thanks all!
Well it is straightforward to sell out that position before transferring. A couple days out of the market with a small amount of money shouldn't matter much (though one could always rebalance elsewhere to correct that if it is a concern). Also shouldn't be an issue tax-wise since it is in an IRA.

Though of course do what you think is best :happy One thing to keep in mind is there may be a penalty associated with withdrawing (assuming this is a pre-retirement withdrawal and assuming I haven't missed something else like this is a Roth)
"Anyone who claims to understand quantum theory is either lying or crazy" -- Richard Feynman
Topic Author
nalor511
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Re: Withdraw 0.13 from IRA, taxable?

Post by nalor511 »

Did the mock return (using 2020 HRB Deluxe) and as expected the 0.13 withdrawal rounds to 0 on the appropriate forms/worksheets and nothing gets submitted to the IRS on my return for this distribution. There is a 10% penalty on $0. I've decided that I probably will not bother doing this withdrawal, but just wanted to follow up and close the issue in case anyone encounters this in the future, it seems like it's fine to do. Best
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