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I am considering transfer a small amount of securities (about $1300~$1400 in market value now) from 1 account to another. The ACATS will cost me $75 which is rather large relative to the amount being transferred.

Both accounts charge $0 for trading, and use the same clearing firm. Therefore, I am thinking of just selling in my old account and buying in my new account. It's hard to imagine losing more than $75 fee in these trading activities. I assume the tax form next year will take care of the wash sale issues if they are using the same clearing firm.

Is there anything I miss or need to be aware of?

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  • Remember that wash rules only apply to losses. If you sell for a gain, you can't carry the basis forward even if you repurchase within 30 days. You will have to pay the capital gains tax.
    – Ben Voigt
    May 4, 2019 at 6:00
  • When you look at the bid/ask, what spread do you typically see for this stock?
    – JTP - Apologise to Monica ♦
    May 4, 2019 at 9:44
  • @ChrisW.Rea: Is ACATS used outside the US, or do other countries have their own systems?
    – Ben Voigt
    May 4, 2019 at 14:07
  • Added US tag as another question posted by member was US tagged.
    – JTP - Apologise to Monica ♦
    May 4, 2019 at 14:39
  • @JoeTaxpayer the spreads of most of them about 0.1% of the price.
    – user67084
    May 4, 2019 at 17:44

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If there are no commission charged in either account then there are some minor issues with selling in one account and buying in another:

  • If bid/ask spreads are wide then you'll have some slippage but for an account with a current market value of $1300~$1400, it will be negligible unless it's penny stocks.

  • If you don't have outside funds to buy in account #2 when you sell from account #1 then you're going to have some market risk while waiting for your funds to settle and even longer if the two accounts are not with the same broker. This may help or hinder you.

  • You will have wash sales if you are taking a loss on securities sold from account #1. You can avoid these by buying something else. If the current holdings are market based ETFs, you can buy something similar and bypass the wash sale deferral.

  • If the securities in account #1 are sold for a gain, you'll have to pay taxes if non sheltered. How much that will reduce your long term growth will depend on the size of the gain. In the grand scheme of things, due to account size, this isn't going to mean much unless you're a genius who turned a $100 investment into $1,400 :->)

Other than the unlikely possibility that you turned $100 to $1,400 (big tax bite due to being in a high tax bracket), I can't imagine a scenario where you're likely to pay anywhere near $75 in your non ACAT transfer idea.

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