RMD of Stock

[Unregistered]

Taxpayer is beginning to take RMD's. He has a form from Scott Trade to fill out for his distribution. One of the options is to "distribute XXX # of shares" from the IRA to my Scott Trade acct.
Would there be any advantage to doing this? He thinks that he could then just show it as capital gain. Not ordinary income.
I think they will still issue a 1099R for the value of the stock transferred.
Anyone have any experience with this? I don't see any advantage.

[Matt Sova]

Ordinary

The value distributed will be ordinary and his holding period for the stock will start as of the date of distribution. His basis will be the amount of the distribution.

[Unregistered]

Thanks. I do see that.
Do you see any advantage to taking the stock from the IRA? Is he trying to get the overall earnings down so his RMD will be less as the years go on?
I'm thinking you would want to keep the value of the IRA up to avoid the tax.

[Bees Knees]

The only advantage is that maybe he thinks the stock will continue to increase in value and it is a good stock to hang on to. So he pays tax now on the IRA distribution at ordinary tax rates, but in the future when the stock is eventually sold, the appreciation will be a capital gain because it is no longer held in the IRA.