Need to be Sold to "Cash", the "Cash" can then be transferred to Schwab, then you can buy other Mutual Funds once its in your Schwab IRA. As a practical matter this is 100% normal and WILL NOT result in any tax consequences to your normal income. Apparently there is an electronic mechanism to transfer normal investment accounts so that stocks do not have to be sold, but there is no equivalent electronic mechanism to transfer (or roll over) a 401k or an IRA. But as other posters said - there is no tax implication to you because of that. When rolling a retirement plan from one institution to another, the money has to transfer in the form of cash.
This means shares of securities have to be liquidated into a dollar amount, (which is a universal asset class easily transferable between institutions) then transfered to a "shell" acct at the new institution.
Attorney Natalie Choate advises IRA beneficiaries to do nothing until they've met with a financial adviser who can explain their options."The worst thing to do would be to cash out the plan, put it in your account, and then go see an adviser and say, 'Now what? Before that happens, learn these eight must-know secrets for handling an inherited IRA.
'" says Choate, the author of the retirement-plan guide, "Life and Death Planning for Retirement Benefits."ADVISER SEARCH: If you're not sure what to do with that inherited IRA, don't shortchange yourself. Christopher Futcher/Getty Images The money in an inherited IRA must be taken out eventually, except in some cases when the beneficiary is the widow or widower of the deceased.
With the pending expiration of the Bush-administration tax cuts, a lot of folks are wondering whether they should accelerate income this year to avoid a higher tax bracket next year.
I recommend year-end tax planning for those who have a choice of taking income in 2010 at a lower rate or 2011 at a higher rate.
After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
When you liquidate your IRA, you'll only owe taxes on the portion of the distribution that comes from deductible contributions and earnings.
Of course, the more income you have, the greater your tax rate.
Tax rates are progressive, so having more income will never reduce your tax rate.
When someone leaves you an individual retirement account, or IRA, you can find yourself at the tricky three-way intersection of estate planning, financial planning and tax planning.
One wrong decision with the inherited account can lead to expensive consequences, and good luck trying to persuade the IRS to give you a do-over.
Similarly, since all Roth IRA distributions are nondeductible, you get those out tax-free but you'll have to pay income taxes on any earnings.