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 the only way to get the value of those shares into your retirement account is to sell them first, pay any tax owed on the gain, and deposit the proceeds — up to $7,500 for 2026, or $8,600 if you’re 50 or older.
Why Shares Can’t Move In Directly
An IRA trustee is not allowed to accept any regular contribution that isn’t in cash.1Office of the Law Revision Counsel. 26 USC 408 – Individual Retirement Accounts Handing over shares of a stock or ETF as your annual contribution — what the IRS calls an in-kind transfer — is flatly prohibited. IRS Publication 590-A lists the acceptable forms: cash, checks, and money orders.2Internal Revenue Service. Publication 590-A, Contributions to Individual Retirement Arrangements In practice, custodians also take wire and electronic funds transfers. Whatever enters the IRA has to arrive as a dollar amount.
Holding both accounts at the same firm doesn’t change this. Even if your brokerage and your IRA are under one login, every dollar entering the IRA as a regular contribution must come in as money, not property.
One boundary worth naming: this cash-only rule governs your own yearly contributions. Rollovers from an employer plan like a 401(k) follow different rules and the statute carves out an exception for them.1Office of the Law Revision Counsel. 26 USC 408 – Individual Retirement Accounts If what you’re actually moving is a former employer’s plan rather than a personal brokerage, you’re in a different process.
What Selling the Stocks Will Cost You
Because the shares have to be sold, the sale itself is a taxable event. If they’ve gained value, you’ll owe capital gains tax on the profit, and the rate depends on how long you held them and your overall income.
Shares held more than a year qualify for long-term capital gains rates, taxed at 0%, 15%, or 20% in 2026 depending on taxable income and filing status.3Internal Revenue Service. Topic No. 409, Capital Gains and Losses Shares held a year or less are short-term gains and get taxed at your ordinary income rate, which is almost always higher.
Higher earners pick up an extra charge. If modified adjusted gross income exceeds $200,000 for single filers or $250,000 for joint filers, the 3.8% net investment income tax also applies to the gain.4Internal Revenue Service. Topic No. 559, Net Investment Income Tax
Your brokerage will issue a Form 1099-B showing acquisition date, sale date, proceeds, and cost basis, which you’ll use when filing for the year of the sale.5Internal Revenue Service. Instructions for Form 1099-B If some of what you’re selling has lost value, those losses can offset gains — but the next section matters.
The Wash Sale Trap With IRAs
Selling a stock at a loss in your brokerage and then buying the same stock, or one substantially identical to it, inside your IRA within 30 days before or after the sale triggers the wash sale rule, and the IRS disallows the loss.6Office of the Law Revision Counsel. 26 USC 1091 – Loss From Wash Sales of Stock or Securities
In an ordinary wash sale between two taxable accounts, the disallowed loss is added to the basis of the replacement shares, so you recover it when you eventually sell. When the replacement sits inside an IRA, the IRS has ruled that no basis adjustment happens.7Internal Revenue Service. Revenue Ruling 2008-5 – Loss From Wash Sales of Stock or Securities The loss is gone for good.
Two ways out: wait at least 31 days after the loss sale before buying the same security inside the IRA, or buy something different in the IRA. The rule only reaches substantially identical securities.
How Much You Can Actually Put In
For 2026, the IRA contribution cap is $7,500, with an extra $1,100 catch-up for anyone 50 or older by year end, for a maximum of $8,600.8Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500 Under the SECURE 2.0 Act, the catch-up amount is now adjusted annually for inflation.
The cap applies across all your Traditional and Roth IRAs combined. $5,000 to a Traditional plus $2,500 to a Roth fills the $7,500 bucket.
You also need taxable compensation to match. The contribution cannot exceed your earned income for the year.9Internal Revenue Service. Retirement Topics – IRA Contribution Limits Earn $4,000 in wages and your ceiling is $4,000, not $7,500. Investment income, rental income, and Social Security don’t count. On a joint return, a non-working spouse can contribute based on the working spouse’s earnings.
Put in too much and the IRS charges a 6% excise tax on the excess every year it stays there.10Office of the Law Revision Counsel. 26 USC 4973 – Tax on Excess Contributions to Certain Tax-Favored Accounts and Annuities Withdrawing the excess and any earnings on it before your tax filing deadline avoids the penalty.
Whether Your Income Lets You Contribute
Income rules differ between the two IRA types, and they decide whether you can contribute to a Roth at all and whether a Traditional contribution is deductible.
Roth IRA Phase-Outs for 2026
Roth eligibility begins phasing out at $153,000 of modified AGI for single filers and ends at $168,000.8Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500 For married filing jointly the range is $242,000 to $252,000. Inside the range you can make a partial contribution; above the top of it, direct Roth contributions aren’t allowed.
Traditional IRA Deduction Phase-Outs for 2026
Anyone with earned income can contribute to a Traditional IRA regardless of how much they make, but deductibility depends on workplace plan coverage. If you’re covered by an employer plan, the deduction phases out from $81,000 to $91,000 for single filers and $129,000 to $149,000 for married filing jointly.8Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500 If you aren’t covered but your spouse is, the range is $242,000 to $252,000. If neither of you is covered by a workplace plan, the full contribution is deductible at any income.
Moving the Money Once the Stock Is Sold
After a sell order executes, the proceeds settle before you can move them. The standard cycle is T+1, one business day after the trade.11U.S. Securities and Exchange Commission. Shortening the Securities Transaction Settlement Cycle Once settled, the cash is free to transfer.
If both accounts live at the same firm, the transfer is usually a few clicks inside the portal. If they’re at different firms, you can push the cash by electronic funds transfer using the receiving custodian’s routing number and your IRA account number, or send a check made payable to the IRA custodian for your benefit.
When you make the transfer, specify which tax year the contribution counts toward. Contributions for 2026 can be made up to April 15, 2027, so a deposit made in early 2027 needs to be designated for the right year. The custodian will not guess.
Once the cash arrives, it typically lands in a sweep or money market position. It does not automatically buy back the stocks you sold. Place new buy orders inside the IRA to put the money to work.
The April 15 Deadline
You don’t need to finish by December 31 for a contribution to count toward the current tax year. For 2026, the deadline is April 15, 2027. A tax filing extension does not push this out — April 15 is firm regardless of when you file your return.