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I was planning to transfer from my Merrill Guided Investing CMA to Wealthfront cash management account. I would be bringing along an IRA as well. For the cash management account transfer, would it create a taxable event?

I appreciate your assistance.

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If Merrill sells anything in the Guided Investing account that has a capital gain, you'll be subject to capital gains taxes. But if it's in FDIC deposits, money market funds, ultra-short bond funds, or similar types of investments that generate income with minimal price movement, you'll likely have a relatively small tax impact.

The IRA won't have a taxable event if anything is sold, just be aware that if the transfer isn't a direct rollover from ML to Wealthfront, you'll have a mandatory 20% tax withholding and 60 days to complete the rollover.

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  • Cash management accounts generally only contain ordinary cash, not securities.
    – Barmar
    May 31 at 15:26
  • Looking further, Merrill Guided Investing CMA has cash and investments together. Mine is a mixture of Equities, Fixed Income, and Cash (very small %) "This investment strategy is for a portfolio of exchange-traded funds (ETFs). Investments in the portfolio may include tax sensitive ETFs that invest in bonds issued by states, cities, counties and other governmental entities."
    – John Richards
    May 31 at 15:51

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