This may very well be stating the obvious....

[progree]

18. Update: I just tried Fidelity IRA RMD withdrawal via direct transfer of shares to a regular

Last edited Sun Mar 15, 2020, 05:12 AM - Edit history (2)

taxable Fidelity account, and it doesn't seem to allow it. I tried twice about 4 hours apart, and both times I got " (MMMH2000) Your transaction cannot be processed at this time. Please try again later, or call a Fidelity Representative at 800-544-6666." )"

I edited #15 and #17 above for this unfortunate discovery. So apparently if someone wants to do this, they would have to call.

I suppose what might have happened in the past is that say Joe needs to do a $8,200 IRA RMD withdrawal/distribution from an account that has fund XYZ in it. XYZ is currently at $41/share, so he specifies transferring 200 shares ($41 X 200 = $8,200) from the IRA to his regular taxable account.

Unfortunately, as usual, Fidelity doesn't do the transfer until after market close, and the new NAV for the fund determined. The new NAV is $39, so 200 shares worth $7,800 get transferred, and that's what's reported to the IRS -- a $7,800 withdrawal/distribution.

Guess who pays a 50% penalty on the $400 difference that should have been distributed but wasn't? Answer Joe. Guess who Joe goes screaming at? The IRS? Maybe. Fidelity? For sure.

So I guess that is why Fidelity isn't allowing this.

BTW I tried doing the same thing at Vanguard and it seemed to be working and like it would do it, but I didn't do the final "Submit" thing because I don't want to actually withdraw from my Vanguard IRA.

I have done Roth conversions at Vanguard via direct transfer of shares (from the Traditional IRA account to the Roth IRA account) many many many times without issue over the past 20+ years.