Can I Transfer Stock From a Brokerage Account to an IRA?

You can’t transfer stock from a brokerage account to an IRA as shares. Federal law requires regular IRA contributions to be made in cash, so you have to sell the stock in your brokerage account first, then deposit the proceeds into the IRA. For 2026, the most you can contribute is $7,500, or $8,600 if you’re 50 or older, and the sale itself will likely trigger capital gains tax.

Why You Can’t Move Shares Directly

An IRA trustee is not allowed to accept any contribution that isn’t in cash.¹ Handing over shares of Apple, an S&P 500 ETF, or any other security as your annual contribution is prohibited. The IRS calls these “in-kind” transfers, and they’re not permitted for regular yearly deposits. Publication 590-A lists the acceptable forms of contribution: cash, checks, and money orders.² Most brokerages also accept wire transfers and electronic funds transfers. Whatever arrives in the IRA has to be a dollar amount.

This holds even when your taxable brokerage account and your IRA sit at the same firm. Same roof, same rule. Every dollar of a regular contribution has to enter as money.

One boundary worth naming: the cash-only rule governs your own annual contributions. Rollovers from an employer plan like a 401(k) follow different rules, and the statute carves out an exception for those transfers.¹ If your shares are actually sitting in a former employer’s plan rather than a personal brokerage account, you’re looking at a rollover, not a contribution, and the process is different.

What the Sale Will Cost You in Tax

Because the shares have to be sold before anything reaches the IRA, the sale is a taxable event. If the stock has gone up since you bought it, you owe capital gains tax on the profit. Two things set the rate: how long you held the shares and your total taxable income.

Shares held more than a year qualify for long-term capital gains rates. For 2026, those are 0%, 15%, or 20% depending on your taxable income and filing status.³ Shares held a year or less are short-term gains, taxed at your ordinary income rate, which is almost always higher.

Higher earners have another line to watch. If your modified adjusted gross income is above $200,000 (single) or $250,000 (married filing jointly), the 3.8% net investment income tax can apply to the gain on top of the regular capital gains rate.⁴

Your brokerage will send Form 1099-B for the sale, showing acquisition date, sale date, proceeds, and cost basis.⁵ You’ll use those numbers on the return for the year of the sale.

Watch for a Wash Sale if You’re Selling at a Loss

Selling a losing position sounds like a tax win, but there’s a trap when the IRA is involved. If you sell a stock at a loss in your brokerage account and buy the same stock (or one substantially identical) inside your IRA within 30 days before or after the sale, the IRS treats it as a wash sale and disallows the loss.⁶

Normally a disallowed wash-sale loss gets added to the basis of the replacement shares, so you recover it later. When the replacement lives inside an IRA, the IRS has ruled the IRA’s basis does not increase.⁷ The loss is gone for good. Wait at least 31 days after the sale before repurchasing the same security in the IRA, or buy something different in the IRA right away. The rule only reaches substantially identical securities.

How Much You Can Actually Put In for 2026

Once the stock is cash, the IRA has its own ceiling. For 2026, the annual contribution limit is $7,500. If you’re 50 or older by year-end, the catch-up adds $1,100, for a total of $8,600.⁸ Under the SECURE 2.0 Act, the catch-up amount is now adjusted annually for inflation.

The limit is combined across all of your Traditional and Roth IRAs, not per account. Put $5,000 in a Traditional and $2,500 in a Roth and you’re done for the year.

Your contribution also can’t exceed your taxable compensation for the year.⁹ Earn $4,000 in wages and $4,000 is your cap, regardless of how much stock you sold. Investment income, rental income, and Social Security don’t count as compensation here. That’s an important detail if the plan was to fund an IRA from investment proceeds without any earned income behind it.

Contribute too much and the IRS charges a 6% excise tax on the excess every year it stays in the account.¹⁰ You can pull the excess (plus any earnings on it) before your tax filing deadline to avoid the penalty.

Whether Your Income Lets You Contribute or Deduct

Income phase-outs decide two separate things: whether you can put money in a Roth IRA at all, and whether a Traditional IRA contribution is deductible.

Roth IRA Phase-Outs

For 2026, Roth eligibility begins phasing out at $153,000 of modified AGI for single filers and disappears entirely at $168,000.⁸ For married filing jointly, the range is $242,000 to $252,000. Inside the range you get a partial contribution; above it, you can’t contribute directly.

Traditional IRA Deduction Phase-Outs

Anyone with earned income can contribute to a Traditional IRA. Whether the contribution is deductible depends on workplace-plan coverage. If you’re covered by an employer plan in 2026, the deduction phases out between $81,000 and $91,000 for single filers and between $129,000 and $149,000 for married filing jointly.⁸ If you’re not covered but your spouse is, the phase-out is $242,000 to $252,000. If neither of you is covered by a workplace plan, the full contribution is deductible at any income level.

The Mechanics: Sell, Move, Reinvest

The actual moves take three steps.

Sell and Wait for Settlement

Place a sell order for the shares in your brokerage account. The proceeds go through a settlement period before the cash is usable. The standard cycle is T+1, one business day after the trade date.¹¹

Move the Cash to the IRA

If both accounts are at the same firm, an internal transfer through the portal usually finishes in minutes. If they’re at different institutions, use an electronic funds transfer with the receiving custodian’s routing number and your IRA account number, or send a check payable to the IRA custodian for your benefit.

Tell the custodian which tax year the contribution is for. Contributions for 2026 can be made through April 15, 2027, so early-2027 deposits need to be labeled for the right year. The custodian won’t guess, and a filing extension doesn’t extend the IRA deadline.

Reinvest the Cash

Money landing in an IRA usually parks in a default money market or sweep account. It will not automatically rebuy the stocks you sold. Place buy orders inside the IRA to put the cash to work. If your old holdings no longer fit the retirement plan, this is a natural point to choose different investments. Keep the custodian’s confirmation statement with your tax records for the year.

1
Office of the Law Revision Counsel. 26 USC 408 – Individual Retirement Accounts
2
Internal Revenue Service. Publication 590-A, Contributions to Individual Retirement Arrangements
3
Internal Revenue Service. Topic No. 409, Capital Gains and Losses
4
Internal Revenue Service. Topic No. 559, Net Investment Income Tax
5
Internal Revenue Service. Instructions for Form 1099-B
6
Office of the Law Revision Counsel. 26 USC 1091 – Loss From Wash Sales of Stock or Securities
7
Internal Revenue Service. Revenue Ruling 2008-5 – Loss From Wash Sales of Stock or Securities
8
Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500
9
Internal Revenue Service. Retirement Topics – IRA Contribution Limits
10
Office of the Law Revision Counsel. 26 USC 4973 – Tax on Excess Contributions to Certain Tax-Favored Accounts and Annuities
11
U.S. Securities and Exchange Commission. Shortening the Securities Transaction Settlement Cycle