No. of Recommendations: 0
I think most trustees will refuse to directly distribute stock from an IRA to the beneficiary. The reason is that it will either be against their rules or they will find it to be an extraordinary request.

In either event, I don't think an "in kind" distribution from an IRA is illegal; rather, your basis in the stock withdrawn would be equal to its fair market value on the date withdrawn and accordingly you would be charged with a distribution in that amount and would be required to pay ordinary income tax on that amount plus a potential 10% penalty.

Thus, the question, why would one bother to take an "in kind" distribution? Instead, just sell the stock and withdraw the cash.

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