I currently have money in the Acorns investment app and would like to withdraw it all to invest using TD Ameritrade. I'm worried that I will withdraw it, reinvest it using TD Ameritrade, then be charged tax on money that's still sitting in an investment account. Is it possible to transfer my money without being charged a capital gains tax since it's not income yet?
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Is it a tax-advantaged account like an IRA? Is the "money" invested in securities you'll have to sell before you can withdraw it, or is it already uninvested cash? Looking for the reason you think there would be a taxable event, if all you want to do is move cash out of one account into another.– BeanlucCommented Apr 9, 2018 at 19:37
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What type of investments do you have in Acorn? And what type of account? If TD Ameritrade has the same funds you should be able to transfer your account. Acorn will likely charge a fee. If you sell an investment you will have to pay taxes on any gains whether or not you move it to a new broker. Unless it is a tax-advantaged account. There are some restrictions on cashing out a tax-advantaged account even when you are moving it to a new broker. So be sure to keep that in mind.– kweinertCommented Apr 9, 2018 at 20:39
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If you withdraw money from a tax advantaged account, you realize the gains. Transfers are different and most can be done without penalty (IRA accounts, annuities, etc.). I don't know what an Acorns investment app is so I wouldn't offer an opinion on that. Contact Acorn and TD Ameritrade and find out what the process is for transfer. Ask if fees are involved (likely that Acorn will have one).– Bob BaerkerCommented Apr 10, 2018 at 0:39
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2 Answers
Yes, you can 100% transfer your assets between custodians without creating a taxable event. I've done this twice over the last few years. You are best served by contacting your new custodian, TD Ameritrade, to request the transfer paperwork. Typically, the outgoing custodian will charge a transfer fee and, depending on the custodian and generally the value of your assets, the new custodian will reimburse that fee. I've also had a fair amount of success getting the new custodian to "buy" my account with things like X free trades or something like that. To my knowledge you can't transfer your unit(s)/share(s) of traditional mutual funds (I've never tried), but your regular common stock and most other assets are transferable without selling or creating a tax event; in fact your cost basis data will be transferred too.
I don't know if Acorn (or Robinhood or any other investment "apps") wrap your assets in some strange thing to facilitate the low dollar trades and prevent the very normal transfer process, but TD will know what's possible.
Contact TDA. If you can, try to go to one of their physical sites. If you have an account with TDA you have a rep that does not work on commission. Call the rep. If you are transferring you may be able to make a direct in kind transfer.
