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Author: GWPotter Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 81560  
Subject: Re: RMD Using In-Kind Transfer Date: 3/7/2014 12:27 PM
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I did such a transfer myself earlier this year. The process may be, and certainly appears, equivalent to a Sell X shares from the IRA and Buy X shares in the taxable account.

There is a page on my Vanguard account that deals with my MRD and I suggest you check that out. First it would be good is your calculation of the RMD agrees with Vanguard. Second the page itself has some helpful information.

To get to the RMD page, login to your Vanguard Account, Click on My Accounts and drop down to the menu item "Retirement contributions, distributions, RMD". On that page, click "Required minimum distribution (RMD)"

When I did my actual funds transfer, I went to my IRA accounts, selected the Vanguard Fund I wanted to move, Clicked Exchange and continued on. The RMD page will give you a dollar amount and you can enter a dollar amount for the RMD transfer.

As I suggested above, when the process was completed in both Quicken and the Vanguard accounts, it appears as a Sell & Buy.

To address you specific question, if you transfer $9,600.00 of a mutual fund that closed at $23.09 on the day of the transfer, the number of shares transferred will be 415.764. It does not matte what the price of the mutual fund was on December 31st or any other date.

The basis that Vanguard will create in your investment account will be the mutual fund cost on the day of the transfer - $23.09 in this case. As has been posted, you will have taxable income in the amount of $9,600 for the example.
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