Taxable vs Roth - stock "shuffle?"

[navyasw02]

I'm at a point where I can start investing heavily into a taxable account. I have numerous stocks already in my Roth IRA, is it worthwhile to shuffle new purchases between accounts? For example, if I have a stock I already own in my Roth at 2.5% yield and I want to purchase a 4% yield, should I sell the 2.5% in the Roth, buy the 4% with those funds from that sale and then repurchase the 2.5% in my taxable account?

[daat99]

You should remember that if you decide to sell the stock at a later date from your taxed account than you will be required to pay the extra tax on the price difference between the stocks.
Personally I wouldn't sell something in one account just to buy it in another but instead I will keep the commissions for myself.

[CritMass]

My recent dilemma is whether or not to try converting funds in my traditional IRA to my Roth. I'm 62 and so have approx 8 years before I have to take RMDs from the traditional IRA. I've read where many say convert a percentage each year for 8 years and pay the tax each time, whether or not you move all or just some. My funds in Trad IRA are mostly individual, dividend paying stocks. So it seems I would have to liquidate several holdings yearly from the Trad IRA and then re- purchase the same favored companies that I would still want to own a second time within my Roth. Somehow I'm not sure if that is the prudent thing as I may be giving up a current increased "yield of cost". The other option is to just leave well enough alone, and pay the tax on the RMD.
Does anyone care to offer thoughts? Has anyone here done that yet? Thanks for reading.

[twil]

I want to do a stock shuffle myself into my Roth from my cash. Can I transfer them over straight ? Or... Do I have to sell then transfer the cash?

I read that I have until the 15th to fund my Roth for 2014. I think it is a good idea for me to get another 5500 into it before 2015.

Thoughts?

[Dividend Watcher]

CritMass,

You shouldn't have to sell and re-buy when going from a traditional to a Roth IRA. You should be able to do an in-kind transaction from one account to the other. That's a brokerage issue unless they are at different brokerages. In that case, usually the current broker will require a liquidation before doing a transfer to the incumbent. The taxable value will be of the date of the actual transaction.

Also, take a look at the tax ramifications such as your marginal tax rate now and what you expect at the time RMDs begin. It may be more advantageous to leave it as is and pay the taxes when you make the RMDs. Instead, you could be better off to just start contributing to the Roth and not add any more to the traditional.

twil,

See above. Also, you have until April 15th to add to an existing Roth. If you are just planning to open a Roth, you've missed the deadline. According to the way I read the code, the account has to have been in existence before December 31st to make prior year contributions to it. That would be a good question to ask your tax professional.

[CritMass]

Thanks Dividend Watcher. My Trad IRA is at Vanguard and the Roth is at Schwab. Every December I liquidate $6,500 worth of SO in my taxable account to fund my Roth every January - I'm overweighted in SO in the taxable account. I think it may be easier as you suggest to just leave things as they are, and keep funding my Roth each year.