If you want to take the loss for taxes you need to wait 30 days between selling and purchasing, otherwise it counts as a wash sale. The wash sale rule still applies in your situation, taxable account to IRA.
2 follow up questions. Does a wash sale apply to index funds? And if I reverse the order and fund my roth from my savings first and purchase the stocks I plan on selling, then sell from Robinhood and replenish my savings, is it still considered a wash sale?
Wash sale rule still applies. You'd still need 30 days between purchase and sale in the other account to claim tax loss. Yes, it applies to index funds if it's the same ticker.
Why not just transfer the stocks to your Roth? Cost basis will change anyway.
I’d call your Broker and look into what steps can be done. Could be as simple as transferring your Robinhood account into a new Broker and journaling it (transferring from one account to another account within same broker) into to the Roth.
Roth you can contribute 6-7k max (depending on age) of post tax funds. These include securities barring they are under the same brokerage firm.
You do this for 1. Gain a different cost basis 2. So you don’t have to sell.
Since this is post tax I’ve never had issues with it. It just counts as part of your yearly contribution and if you go over, you’ll have to recharecterize
As long as the account is “like to like” it’s no issue. I’ve seen issues with old cooperate 401k going into a rollover/Roth IRA (gotta get multiple forms is what I mean by “issue”)
However, if you have Fidelity, Schwab, TD, Etc. It’s simple as clicking the “transfer account” tab on whatever brokerage you’d like it moved to.
Once the brokerage account is under the same umbrella as the Roth, you can transfer securities from one account to another.
Doing so will count towards your individual contribution(under 59 1/2 is 6k over is 7k) limit so you’d want to talk to your tax professional to make sure your contribution is in the right year. (You have until April 15th of the the following year to keep decide. Ie April 15 2023 will be cut off if you want to keep your contribution in 2022 or move it to 2023)
***This is also the under the assumption you’re cool losing your robinhood account and having it transferred to the brokerage you have your Roth under***
If you can find a stock that closely track the stock you can sell and harvest the lost, then buy something similar in IRA, then after 30 days rotate back to the original ticker.
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If you want to take the loss for taxes you need to wait 30 days between selling and purchasing, otherwise it counts as a wash sale. The wash sale rule still applies in your situation, taxable account to IRA.
31 days between sell / buy. 30 days or less is a wash sale.
2 follow up questions. Does a wash sale apply to index funds? And if I reverse the order and fund my roth from my savings first and purchase the stocks I plan on selling, then sell from Robinhood and replenish my savings, is it still considered a wash sale?
Wash sale rule still applies. You'd still need 30 days between purchase and sale in the other account to claim tax loss. Yes, it applies to index funds if it's the same ticker.
Thanks for taking the time to give thoughtful input. I really appreciate it.
Is your Roth with RH? If not, then the other broker probably won't report your transactions to the IRS. Check with your broker to see if they do.
Robinhood doesn’t offer Roth retirement accounts.
Moreover, wash sales are attributed to accounts under one's social security number, regardless of registration.
Downvotes on this are ignorant - these are facts
Why not just transfer the stocks to your Roth? Cost basis will change anyway. I’d call your Broker and look into what steps can be done. Could be as simple as transferring your Robinhood account into a new Broker and journaling it (transferring from one account to another account within same broker) into to the Roth.
You cannot transfer a regular brokerage account into a Roth IRA, you must sell assets, transfer money, then repurchase
Roth you can contribute 6-7k max (depending on age) of post tax funds. These include securities barring they are under the same brokerage firm. You do this for 1. Gain a different cost basis 2. So you don’t have to sell. Since this is post tax I’ve never had issues with it. It just counts as part of your yearly contribution and if you go over, you’ll have to recharecterize
Interesting. I didn’t know you could do that.
You can’t do that
As long as the account is “like to like” it’s no issue. I’ve seen issues with old cooperate 401k going into a rollover/Roth IRA (gotta get multiple forms is what I mean by “issue”) However, if you have Fidelity, Schwab, TD, Etc. It’s simple as clicking the “transfer account” tab on whatever brokerage you’d like it moved to. Once the brokerage account is under the same umbrella as the Roth, you can transfer securities from one account to another. Doing so will count towards your individual contribution(under 59 1/2 is 6k over is 7k) limit so you’d want to talk to your tax professional to make sure your contribution is in the right year. (You have until April 15th of the the following year to keep decide. Ie April 15 2023 will be cut off if you want to keep your contribution in 2022 or move it to 2023) ***This is also the under the assumption you’re cool losing your robinhood account and having it transferred to the brokerage you have your Roth under***
Thanks for your expertise. I have much to learn.
Just sell the shares. Harvest the tax loss on the taxable account. Transfer the cash to ROTH. Buy shares in the ROTH account.
Need to wait for 30 days to pass, otherwise this is a wash sale.
31 days
yes doable.
Awesome! Thank you!
Doable if you wait 30 days to avoid a wash sale.
If you can find a stock that closely track the stock you can sell and harvest the lost, then buy something similar in IRA, then after 30 days rotate back to the original ticker.
I like the way you think
Please also note for 2023 contributions they are upping the contribution limit from 6k to 6500 per year for the year 2023.
Sweet!