Tax Implications of Transferring Stocks Between Brokerages

How pros move portfolios without tax surprises

Moving a portfolio isn’t hard, until taxes get involved. The pros treat transfers like a surgery, not a sprint, because the fastest way to turn a clean shift into a messy April surprise is to sell in one account and rebuy in another. In 2025, the playbook is simple: use ACATS, keep it in-kind, preserve every tax lot, and time it around Q4 quirks. You want the tax math to chill while your assets walk across the street.

Here’s the high-level map of what the best folks do differently, and why it matters right now with year-end creeping up and markets still choppy after those rate-cut feints earlier this fall:

• They initiate ACATS in-kind, not sell-and-rebuy. That keeps the cost basis intact and avoids creating a taxable event mid-transfer. FINRA notes that most ACATS transfers complete in about 3-6 business days (2023 guidance), which is quick enough that you don’t need to blow up positions just to move. Selling first is usually a self-inflicted tax bill.
• They map cost-basis lots up front. Every lot. Pros export a full lot-level file, confirm the receiving brokerage supports Specific ID (not just FIFO), and verify default settings before the transfer. If the destination flips you to FIFO without you noticing, your next trim could realize high-gain lots you never meant to touch.
• They sanity-check wash-sale landmines. The IRS wash sale rule is a 61-day window, 30 days before and after the sale, per IRS Pub. 550 (latest revision still uses the same 30-day standard). If you’re tax-loss harvesting in Q4, transferring the same or “substantially identical” security between brokers inside that window can disallow the loss. Yep, a small dividend reinvestment on the other side can do it.
• They watch dividends and corporate actions. Ex-dates mid-transfer can split a position: shares land in the new account while a dividend posts to the old one. Not fatal, just messy, 1099s get split, and cost-basis adjustments for returns of capital or spinoffs can misalign. Many mutual funds post capital gains distributions in November-December, another reason to check calendars before you pull the trigger.
• They time around Q4. Pros avoid initiating moves during their own active TLH windows or the last two weeks of December when ops teams are juggling distributions, RMD deadlines, and year-end statements. ACATS is quick, until it isn’t, and getting stuck over New Year’s is… not fun.

Quick reality check: FINRA says ACATS is typically 3-6 business days (2023), but partial transfers, reorgs, or margin holds can extend that. And the IRS wash-sale window is 30 days before/after, unchanged.

What you’ll get here: an actionable, 2025-ready checklist for moving assets in-kind, preserving every lot, keeping wash sales at bay, and scheduling around Q4 noise. I’ll flag the gray areas, the places where “it depends” actually depends, and the tiny settings that matter more than the glossy pitch decks admit. Oh, and if your receiving broker’s default dividend setting is DRIP on everything by the way… that’s how accidental wash sales sneak in. Dont ask me how I know.

Transfers aren’t taxable, until you make them taxable

Here’s the straight version: moving the same securities in-kind via ACATS from Brokerage A to Brokerage B is not a taxable event. You owned 200 shares of XYZ before, you own 200 shares after, no sale, no gain, no loss, no 1099-B for that movement. Basis, acquisition dates, and lot IDs should carry over intact. Should. I’ve seen cost basis get scrambled when the sending firm used average cost on mutual funds and the receiving firm defaults to FIFO, so yes, it’s “non-taxable,” but audit your lots anyway. A 10-minute check now saves a 90-minute April headache.

Where folks accidentally make it taxable is the cash leg. If you sell positions to “clean it up” before the transfer, that’s a sale. Taxable. The calendar matters here: short-term (held one year or less) is taxed at ordinary income rates, up to 37% federally in 2025, while long-term (held more than one year) gets the 0%/15%/20% long-term capital gains rates depending on income. On top of that, high earners may owe the 3.8% NIIT, and state taxes can add around 5-7% depending on where you live. So selling on day 364 vs day 366? That’s not semantics; that’s real money.

And a small but common gotcha during ACATS: fractional shares. Most brokers can’t move fractional shares in-kind through ACATS, so they auto-liquidate the fractional remainder and sweep the cash. It’s usually pennies to a few bucks, but it is a sale and will show up on your 1099-B. If you own 23.4 shares of an ETF, expect 0.4 to be sold, 23 to move in-kind. Not the end of the world, just don’t ignore it when you reconcile gains and losses at tax time. I’ve had clients miss these tiny lots and wonder why TurboTax is yelling.

Another line that trips people: moving from a taxable brokerage account into an IRA or Roth IRA isn’t a transfer. It’s a sale in taxable (taxable gain/loss rules apply), then a contribution into the IRA/Roth subject to annual limits, eligibility, and deductibility rules. Different animal entirely. Conversions (Traditional IRA to Roth) are also taxable events on the converted pre-tax amounts. Treat account-type changes as tax events unless you’re doing pure trustee-to-trustee transfers within the same tax wrapper (e.g., Traditional IRA at Firm A to Traditional IRA at Firm B).

Timing and market mechanics matter, too. If you’re already harvesting losses this year, selling additional lots right before or after a transfer can trigger the IRS wash-sale rule if you rebuy substantially identical securities within 30 days before/after. That disallows the loss and rolls it into the new basis. Reinvestment settings matter here, DRIPs that kick in during settlement windows can accidentally create a wash sale while you’re mid-transfer. I’ve seen it happen the last week of December, when distribution reinvestments hit and ops teams are buried. Not ideal.

Quick context on speed since people ask: FINRA’s guidance says standard ACATS completes in about 3-6 business days (2023). Partials, margin, or reorgs can stretch that. None of that timing is taxable by itself, it just changes when trades settle relative to your one-year holding clock and year-end cutoff. If you’re bumping against the long-term mark, wait to sell until the calendar flips your lot to long-term. If you need cash, consider transferring in-kind first, then selling at the destination after you pass your one-year date.

Checklist, tax edition: (1) Prefer in-kind over pre-transfer sales to avoid taxable gains unless there’s a very good reason. (2) Lock your lot instructions and verify basis/holding periods after arrival. (3) Expect fractional share liquidations and record the tiny 1099-B lines. (4) Avoid wash sales, pause DRIPs and stagger buys/sells by 31+ days. (5) Don’t “transfer” into IRAs, know it’s a sale + contribution with separate rules.

Over-explained but important: a transfer is just a change of address for your shares. The second you turn shares into cash, or change the tax wrapper, you’ve changed the tax story. That’s the line. Keep the shares the same, keep the taxes quiet.

Cost basis, lots, and wash-sale traps across brokers in 2025

This is where people get nicked. Not because they’re reckless, but because the mechanics are boring and easy to gloss over. We’re in Q4, tax-loss harvesting chatter is loud again, and after two years of on-off volatility and AI-led rallies, lots are messy. Here’s the part that actually hits your 1099-B and your refund.

Covered shares and what brokers actually report. The IRS phased this in years ago and it still governs 1099-Bs today: (1) Equities acquired on/after 2011 are “covered,” (2) mutual funds and DRIPs acquired on/after 2012 are covered, (3) options acquired on/after 2014 are covered, and (4) most additional fixed income and more complex products acquired on/after 2016 are covered. Pre-coverage lots are “noncovered”, brokers may show basis, but they aren’t required to report it to the IRS. Translation: you own the accuracy, especially for older positions you’ve dragged across three custodians since 2010. I’ve had to reconstruct basis from decade-old PDFs more than once. Not proud, but it happens.

Your holding period travels with the shares. If you ACAT transfer shares you bought on March 10, 2025, the receiving broker should show that March 10 date. It doesn’t reset just because you moved them. What resets it? Selling and rebuying. Obvious, I know, but in practice people sell at Broker A “to clean it up,” wire cash, and rebuy at Broker B. Now your clock restarted and you lost long-term treatment. If you’re on the cusp, move in-kind first, then sell after you cross one year. I’ve literally seen a client miss the 366th day by hours. Painful.

Wash-sale rule applies across every account you touch. The 30-day window before/after the sale is not just within the same account. It’s across all your taxable accounts, all your brokers, and, yep, your spouse’s accounts in community-property contexts. Sell NVDA at a loss in your taxable account, keep the DRIP running in her account, and your loss can get disallowed and rolled into basis. That can ruin a careful harvest plan. In Q4, I pause auto-reinvest on funds and ETFs I’m likely to harvest. Turn it back on later. Simple, but easy to forget.

Quick guardrails: (1) Pause DRIPs 31+ days around loss sales. (2) Avoid buying “substantially identical” securities, swap S&P 500 ETF A to a total-market ETF or an equal-weight variant for 31 days. (3) Track every account in the household, spouse included.

Specific-lot ID doesn’t always survive a transfer. If you were picking high-basis lots at the old broker, do not assume those elections carry over. Some firms drop the default back to FIFO on arrival. Re-elect “Specific ID” and re-attach your lot instructions as soon as positions land. Otherwise your first sale might chew through low-basis 2020 lots and spike your gain. I’ve seen that movie, nobody liked the ending.

When the receiving broker mis-maps basis. It happens. Fractional shares get liquidated, merger histories get scrambled, or cost basis comes over as “unknown.” You can fix it. Keep the original broker’s year-end statements, trade confirms, and any corporate action notices. If you correct basis within the broker interface and attach docs (some allow secure uploads), the 1099-B can be updated before it’s issued, or the broker will include an adjustment code. Worst case, you file with the corrected basis on Form 8949 and attach a statement. Annoying, but fixable.

A too-simple example (but it makes the point): You bought 200 shares of XYZ at $50 in 2023 and 200 shares at $90 in April 2025. Stock’s now $80. If you want to harvest a loss, you sell the $90 lot for a $10 loss per share. If you accidentally have FIFO turned on at the new broker, you’ll sell the $50 lot and realize a $30 gain instead. Same security, same day, totally different tax bill, because of lot method. That’s why we re-elect specific ID after every transfer.

Where 2025 market conditions matter. With rates still the main headline this year and mega-cap tech whipsawing around earnings, people are rotating between similar ETFs and single-name proxies. That’s fine, but be cautious on “substantially identical.” Two S&P 500 ETFs from different issuers are generally treated as substantially identical. Swapping to a total-market or equal-weight index for 31 days is cleaner. Not perfect, cleaner. My take: don’t get cute, harvest the loss, park in something similar-but-not-identical, move back after the window.

• Key dates that still govern basis reporting: Equities 2011+, Mutual funds/DRIPs 2012+, Options 2014+, Expanded fixed income 2016+.
• Holding period: Transfers carry it; sells reset it.
• Wash sales: 30 days before/after, across all accounts and brokers, spouse included in community-property settings.
• Fixes: You can correct basis, save statements and confirms.
• Lot strategy: Re-elect specific-lot ID at the new broker immediately.

Retirement vs taxable: very different rules

Quick mental reset: moving money inside retirement accounts (IRAs/401(k)s) lives under one tax regime; moving assets in a regular brokerage lives under a different one. Same tickers, very different playbook. And in 2025, the rules are the same as last year on this front, no big changes, which honestly is a relief.

Inside IRAs and 401(k)s

• In-kind trustee-to-trustee IRA transfers are not taxable. If you move your Traditional IRA from Broker A to Broker B directly (they talk to each other; you never take possession), there’s no tax, no withholding, no 1099-R with a taxable amount. Same if it’s a Roth IRA, and the assets go Roth-to-Roth. Easy, clean.
• 60-day rollovers exist, but they’re risky and tightly limited. Per IRS Publication 590-A, you get one IRA-to-IRA 60-day rollover per 12-month period (not one per account, one total). And the clock is 60 days, not business days. Miss it by a day and the distribution is taxable; if you’re under 59½, an extra 10% penalty can apply. I’ve seen people blow this, good people, because life got in the way.
• Roth IRA transfers vs conversions, do not mix these up. A Roth IRA transfer (Roth-to-Roth, direct) is non-taxable. A Roth conversion (Traditional IRA or pre-tax dollars to Roth) is a taxable event in the year you convert. Conversions can be smart, especially if your 2025 income is temporarily lower, but they are still taxable income in 2025.
• 401(k) to IRA rollovers aren’t the same as a broker transfer. If you do a direct rollover from a 401(k) to an IRA, no tax and no withholding. But take the check payable to you and it’s generally subject to 20% mandatory withholding at the plan level. You can still complete a 60-day rollover, but you’d have to replace that withheld 20% out of pocket to avoid tax on that portion. I’ve seen this trip folks up after job changes, especially with multiple small legacy plans.

Taxable brokerage accounts

• Basis and holding period transfer with you. Moving a taxable account from Broker A to Broker B (ACAT in kind) carries your cost basis and holding period if the position is “covered.” Covered basis reporting rules kicked in on different dates: equities 2011+, mutual funds/DRIPs 2012+, options 2014+, expanded fixed income 2016+. If lots are noncovered (pre-rule), you still need your own records, Broker B may not reconstruct them.
• IRAs don’t track capital gains; taxable accounts do. Inside an IRA, there’s no concept of capital-gains tax on trades. All the action happens when money comes out. In a taxable account, each sale can trigger short- or long-term gain/loss. Same stocks, different tax universe.
• Nondeductible IRA basis, keep it straight with Form 8606. If you’ve made nondeductible contributions any year, you must track basis on Form 8606. That basis matters for future distributions and conversions (pro-rata rules). The IRS won’t do this for you, and brokers don’t track 8606 basis, that’s on you.

Why it matters right now

With markets choppy this year (rate cuts still debated, megacap leadership wobbling in Q3), people are rebalancing and moving accounts to simplify. That’s fine. Just remember: a transfer inside IRAs is tax-neutral; a distribution you intend to roll can become taxable if you miss the 60-day window or the once-per-12-month rule. And with 401(k)s, avoid the 20% withholding surprise, go direct when you can.

One last practical thing (I repeat because it saves headaches): in taxable accounts, verify your lots immediately after a transfer, specific-lot elections sometimes fall off. In IRAs, tax lots don’t affect current taxes, but in taxable they absolutely do, and they do in a big way.

Summary: direct IRA transfers, non-taxable; 60-day rollovers, one per 12 months and time-limited; Roth transfers, non-taxable, Roth conversions, taxable; 401(k) indirect rollovers, 20% withholding risk; taxable accounts, basis and holding period carry, IRAs, no capital gains tracking but keep Form 8606 for nondeductible basis. Simple, not simple.

Corporate actions, fractional shares, and other messy edge cases

This is where clean theory meets real-world noise. And yes, this is exactly where 1099s go sideways. Why? Because corporate actions and partial positions don’t neatly line up with transfer timelines, and year-end reporting doesn’t wait for your broker’s back office to “catch up.”

Pending mergers/splits/spins mid-transfer. If you’re moving shares and a split, merger, or spin-off is pending, your cost basis can get delayed or distorted. Simple question: should you pause the transfer until after the action posts? Short answer: usually, yes. I’ve seen 10-for-1 splits hit during an ACATS transfer and the receiving broker picked up the post-split share count but no adjusted lot details for days. In 2024 we had high-profile splits (Chipotle’s 50-for-1 and NVIDIA’s 10-for-1), and Q4 often brings spin announcements. When the action is in-flight, the transfer file may not carry the final basis adjustments or the new CUSIP mapping. That creates a mismatch on Form 1099-B, and then you’re reconciling by hand in February, ask me how I know.

Dividend reinvestments during transfer. DRIPs that hit while shares are moving can create tiny tax lots that simply go missing. They’re real, they’re taxable, and they often don’t show at the destination unless both sides sync perfectly. Fix? Reconcile monthly statements from both brokers against your tax lots. It takes 10 minutes, saves hours in March.

ESPP/RSU lots. Equity comp has a built-in booby trap: compensation income. For RSUs, your basis is the fair market value at vest (that amount already shows on your W-2). If the receiving broker imports only the grant date or a blank basis, you’ll double-tax yourself when you sell. For ESPPs, a “disqualifying disposition” includes ordinary income equal to the discount (up to 15% in many plans) and possibly part of the spread at purchase, again, W-2. Make sure the lot-level basis at the new broker reflects the W-2 component. If it doesn’t, edit it. Painful? A bit. Necessary? Absolutely.

Fractional shares. Most brokers can’t ACATS fractions. They’ll sell the 0.13 share and transfer the 100 whole shares in-kind. That sale is reportable. Watch for a tiny 1099-B line with proceeds like $0.37, don’t laugh, those cents can trigger CP2000 letters if ignored. If you’re moving during a heavy DRIP period (Q4, with special dividends floating around some years), expect more fractions and more micro-sales.

Crypto. Crypto doesn’t go through ACATS at all. You either move it on-chain (wallet-to-wallet) or do an off-chain transfer within the same platform family, and you, not your traditional broker, are responsible for cost basis continuity. Check your platform’s tax export before you move, and again after. Also, timing matters this year: the IRS finalized new digital asset reporting rules that bring Form 1099-DA into play for 2025 transactions (brokers will furnish forms in 2026). Translation: records you keep now will be matched later. Sloppy basis tracking that was “fine” last year won’t be fine going forward.

Why 1099s often don’t match? Two main reasons: the cost basis reporting regime and timing lags. Under IRS covered securities rules, brokers must report basis for: (1) equities acquired on/after 2011, (2) mutual funds/DRIPs acquired on/after 2012, and (3) options and many debt instruments acquired on/after 2014. Pre-coverage lots are on you. And the timing bit: brokers must furnish Form 1099-B to you by February 15 (IRS deadline to recipients), but corrections are common into March as corporate action data settles. So yes, your “final” might not be final. Annoying, but normal.

Tactics that actually help:

• Pause transfers if a split/merger/spin is pending; move after the action posts and basis updates are live.
• Export a full lot-level file (CSV/PDF statements) before initiating ACATS, especially for ESPP/RSU and DRIP-heavy tickers.
• Expect the fractional sale. Note the date, proceeds, and original lot. Match it to the 1099-B line item later.
• For RSUs, set basis to FMV-at-vest per lot; for ESPP, include the W-2 income element so you’re not taxed twice.
• Crypto: pull a comprehensive gains report pre-transfer; verify that cost basis and acquisition dates persist after moving. If they don’t, fix them now, not on April 14.
• In February, compare the consolidated 1099 to your exports. If it doesn’t tie out, request a corrected 1099 before you file.

Is this messy? Yep. Markets this year are choppy, corporate actions keep rolling, and back offices aren’t magical. My philosophy is simple: assume something will be missing, collect the docs anyway, and keep the humility to check your own numbers twice. You’ll thank yourself in April.

Paperwork you’ll see next spring: what to expect on 1099s

Here’s the simple version (well, as simple as taxes get). If a sale happened, you’ll see it on Form 1099‑B from the broker that received the assets. The 1099‑B line shows your gross proceeds, the cost basis for covered shares, and whether the IRS sees it as short- or long‑term. Covered lots are those the receiving firm is required to track and report to the IRS, generally equities acquired on or after 2011 and mutual funds/DRIPs on or after 2012; older “noncovered” lots may show proceeds only. My take: don’t panic if basis is blank for some ancient lots; that’s normal, not a scandal.

For in‑kind transfers with no sales, you won’t see 1099‑B activity, except for the tiny fractional share liquidation many brokers do during ACATS, or any dividends that happened in transit. Those will generate short one‑liners on the 1099‑B (for the fraction sale) and 1099‑DIV/INT for income. That tiny $3.42 proceeds line? Save it. It ties back to the lot you noted earlier.

Timing matters. Brokers are required to furnish 1099‑B/1099‑DIV/1099‑INT to investors by February 15 each year (IRS recipient deadline; this is current for 2025). In practice, you’ll get a consolidated 1099 packet in February. If your holdings had REITs, foreign tax credits, or late corporate actions, you may see a corrected 1099 in March. Don’t file too early if you moved accounts or own anything even mildly messy, filing on February 2 is how you end up amending in April. I did that once in 2019; never again.

What if the cost basis is wrong on the 1099‑B? It happens. You can adjust on Form 8949 (which feeds Schedule D). Use the adjustment column, reference the appropriate code (often code B or O when you’re fixing basis/reporting differences), and keep your documentation, trade confirms, the lot‑level export you grabbed, and the ACATS confirmation. Keep it boring and traceable. The IRS computers mainly want the math to foot and the story to make sense. Small note: wash sales still apply after a transfer, so if you bought back inside 30 days at either broker, expect a wash adjustment on basis. Yes, it’s annoying.

IRAs are different. You won’t get a 1099‑B for trades inside the IRA. Instead, you’ll receive Form 5498 by May 31 (that’s the IRS deadline for custodians to send it to you for the prior tax year). It shows contributions, Roth conversions, and rollovers. It’s informational, no filing required, but I always reconcile it to my own records to confirm the exact contribution amounts by type (Traditional vs. Roth) and year designation. If you did a backdoor Roth this year, make sure the 1099‑R (sent by January 31) and the 5498 line up. When they don’t, it’s usually because the conversion posted in January with a prior‑year designation. Happens all the time.

One more real‑world point because 2025 markets haven’t exactly been calm: with higher day‑to‑day volatility and a lot of AI‑adjacent corporate actions, corrected 1099s have been more common after late reclassifications. I’m speculating a bit, but my read is we’ll see the usual wave of corrections again this March. So, grab the February consolidated, compare it to your CSV export, and if it doesn’t tie, ask for a correction before you file. I know, it’s a slog. But matching proceeds, basis, and holding periods now is cheaper than an amended return later.

Your transfer game plan for Q4 2025

Here’s the practical checklist I keep on my desk when moving accounts in the fourth quarter. Markets are still choppy this year, AI names popping 3-5% on headlines one day, giving it back the next, so the fewer surprises you create for yourself, the better. And timing matters in Q4 because a stray taxable sale on December 28 can change your 2025 bill.

1. Before anything: download everything. From the sending broker, pull your full tax‑lot history, cost‑basis files (CSV), and year‑to‑date 1099 activity. Save PDFs and CSVs. If basis is missing on any lots acquired years ago, note it now; cost basis reporting rules vary by acquisition date, and reconstructing in February is… not fun.
2. Request an in‑kind ACATS transfer. Ask for positions to move as-is. Don’t sell unless you’re intentionally realizing gains or losses. Most equity/ETF ACATS complete in about 3-6 business days after validation based on typical DTCC/firm timelines, though thinly traded or restricted securities can take longer. Also, expect transfer‑out fees (often $50-$125 per account); factor that into whether you consolidate all at once or in waves.
3. Confirm your lot method at the new broker. If you use Specific Identification for tax‑loss harvesting, set it as the default immediately and re‑establish standing instructions (which lots to sell first). I’ve seen new accounts default to FIFO and accidentally realize short‑term gains. Happens more than it should.
4. Pause DRIPs and auto‑buys around harvested losses. The IRS wash‑sale rule looks at purchases within 30 days before/after a sale at a loss. I use a 31‑day buffer to be safe. Turn off dividend reinvestments and any scheduled buys in that window, at both the old and new broker if the transfer spans month‑end.
5. Reconcile positions after completion, line by line. Check share counts, lot dates, and basis against your downloads. Fix discrepancies immediately; new brokers can request a basis carryover correction, but it’s cleaner now than after 1099s. And if an odd lot didn’t show up, check whether it was a restricted share or a position pending a corporate action earlier this year.
6. Flag fractional share liquidations. ACATS doesn’t move fractional shares; they’re usually liquidated at the sending broker and reported on your 1099‑B. Note each ticker, proceeds, and date, and set a reminder to capture it on taxes. Small dollars add up when you stack a dozen DRIP names.
7. Sanity‑check your 2025 tax picture. If you’re unsure, run a quick 2025 preview with your advisor or software before year‑end. Two anchors: the $3,000 annual cap on net capital loss deductions against ordinary income (carry the rest forward), and the 30‑day wash‑sale clock. If you harvested losses earlier this year and then rotated back in too fast, well, you know where I’m going.

One small sidetrack: if you hold options, check expirations around transfer dates. Assignments can still hit while the position is in motion; operationally messy, taxable for real. And yes, reported holding period (short‑ vs long‑term) must follow the lots, so keep your CSV trail tight.

Pro tip: Do the move mid‑month in Q4, avoid ex‑dividend weeks on your largest holdings, and keep a simple spreadsheet for “sold intentionally” vs “moved in‑kind.” It reads obvious; it saves headaches.

Bottom line, keep the transfer in‑kind, control your lot methods, avoid wash‑sale landmines, and reconcile basis right away. If something looks off, ask for a correction before 1099s go final in February/March. I’ve been burned by waiting; don’t repeat my mistake.

Frequently Asked Questions

Q: How do I move my portfolio in 2025 without triggering taxes?

A: Use an ACATS in-kind transfer. Don’t sell and rebuy. In-kind keeps your existing positions and cost basis as-is, so there’s no taxable sale during the move. Before you start: 1) export a full tax-lot report (every lot, not just totals), 2) confirm the receiving broker supports Specific ID and set it as your default, 3) turn off DRIPs temporarily so a tiny dividend reinvestment doesn’t create a new lot mid-transfer, and 4) check for pending dividends/corporate actions and, if needed, wait until after the ex-date. ACATS typically finishes in about 3-6 business days per FINRA (2023), which is fast enough that you don’t need to blow up positions just to switch brokers.

Q: What’s the difference between ACATS in-kind vs. selling and rebuying during a transfer?

A: In-kind via ACATS: positions move intact, cost basis carries over, no sale, so no capital gains recognized just becuase you changed brokers. Selling and rebuying: you create a taxable event now (short- or long-term, depending on holding period), then you start a brand-new holding period on the repurchase. You also risk wash-sale headaches if you sell at a loss and rebuy within 30 days. Nine times out of ten, in-kind is cleaner and cheaper on taxes. I only see sell/rebuy used when clients want to intentionally realize gains/losses for planning reasons.

Q: Should I worry about wash sales if I’m tax‑loss harvesting and moving brokers in Q4?

A: Yes, this is where folks slip. The IRS wash sale rule uses a 61‑day window (30 days before and after the sale); IRS Pub. 550 still spells out that 30‑day standard. If you sell at a loss and either broker buys a substantially identical security inside that window, including an auto‑reinvested dividend, you can disallow the loss and it gets added to basis instead. Practical moves: pause DRIPs on both accounts, avoid repurchases of the same or near‑identical ETF/stock for 31+ days, consider a not‑substantially‑identical placeholder (e.g., a different index exposure) if you need to keep market exposure, and schedule the transfer so any harvesting and the 31‑day clock don’t overlap. Keep an eye on both sides; wash sales can straddle brokers.

Q: Is it better to transfer in-kind now or wait, and what are my alternatives if the new broker doesn’t support Specific ID?

A: If you’re inside dividend/corporate action windows or actively harvesting losses, waiting a couple weeks can save admin pain (split 1099s, basis adjustments). Otherwise, transfer in‑kind now and turn off DRIPs until everything lands. If the destination won’t support Specific ID, you’ve got options: 1) open at a broker that does (yeah, annoying, but worth it for tax control), 2) keep high‑gain, multi‑lot positions where you have Spec ID and only move simpler holdings, 3) transfer in‑kind, then immediately DTC out those complex positions to a different account that supports Spec ID, or 4) if you must move everything, document lots meticulously and plan trims more carefully since FIFO can pull high‑gain lots first. Not perfect, but better than flying blind.

@article{tax-implications-of-transferring-stocks-between-brokerages,
    title   = {Tax Implications of Transferring Stocks Between Brokerages},
    author  = {Beeri Sparks},
    year    = {2025},
    journal = {Bankpointe},
    url     = {https://bankpointe.com/articles/tax-implications-stock-transfer/}
}