Transferring an Account
Moving positions between firms is a standardised process that preserves holdings and cost basis. Selling and rebuying is a different thing entirely.
MadStockAlerts Research · Updated August 29, 2026
What to take away
- An in-kind transfer moves positions without selling them, which avoids a taxable event.
- The standard process is initiated at the receiving firm, not the delivering one.
- Positions the receiving firm cannot hold are excluded and must be dealt with separately.
- The account is typically frozen while the transfer is in progress.
- Cost basis follows the position, and it arrives later and sometimes incorrectly.
MAD Academy Training Video · 0:45
Moving an Account Without Selling It
A transfer moves positions in kind rather than liquidating them, which preserves both the tax position and the cost basis — if it goes right.
This lesson is part of a Stock Alerts + Tools plan.
In kind, or in cash
| In kind | Liquidate and transfer cash | |
|---|---|---|
| What moves | The positions themselves | Cash only |
| Taxable event | No | Yes, on every gain, in a taxable account |
| Market exposure | Continuous | Out of the market between the sale and the repurchase |
| Cost basis | Transfers with the position | Reset by the repurchase |
The second row is decisive in a taxable account with embedded gains. Liquidating to move firms realises every one of them in a single year, which is a cost that has nothing to do with the reason for moving.
How the process runs
- 1Open the destination account firstIt has to exist, and it has to be the same registration type as the one being transferred.
- 2Submit the transfer request thereThe receiving firm initiates and pulls; the delivering firm does not push.
- 3The delivering firm validatesIt checks the registration matches and flags anything it cannot transfer.
- 4The positions moveTypically within a week or two for a standard account, longer for anything unusual.
- 5Basis follows separatelyCost basis is transmitted after the positions, sometimes weeks later.
The account is generally restricted during the transfer, so positions cannot be traded while it is in flight. Anyone holding something they may need to act on should know that window exists before starting.
- 1Open the destination accountIt must be the same registration type
- 2Submit the request thereAt the receiving firm, not the one being left
- 3The delivering firm validatesAnd flags anything it cannot transfer
- 4Positions moveTypically a week or two, and the account is restricted meanwhile
- 5Basis followsSeparately, and sometimes incomplete for older lots
What does not transfer
- Proprietary funds of the delivering firm, which the receiving firm may not be able to hold.
- Securities the receiving firm does not support, including some foreign listings and partnerships.
- Fractional shares, which are commonly liquidated rather than transferred.
- Options positions near expiry, which some firms decline to move.
- Anything held in a different registration, since the two accounts must match.
Each of these has to be resolved before or during the transfer, usually by selling, which reintroduces the tax consequence for that portion. The exclusions are identified during validation, and finding out then is later than finding out first.
Checking what arrived
A transfer is complete when the positions and the basis are both correct, and the second half is where errors survive. Basis arrives separately, is frequently incomplete for older lots, and remains the account holder's responsibility whatever the broker reported.
| Check | Why |
|---|---|
| Share counts, position by position | Fractions and odd lots are where discrepancies appear |
| Cost basis and acquisition dates | Missing dates change the holding period, which changes tax treatment |
| Any position marked non-covered | Basis was not reported and has to be substantiated from records |
| Fees charged for the transfer | Both firms may charge, and the amounts are in the account agreements |
Keeping the final statement from the delivering firm is the practical safeguard. It is the record of what was held and at what basis, and reconstructing that later without it is considerably harder.
Partial transfers, and residual balances
A transfer can move an entire account or specified positions. A partial transfer keeps the original account open, which has consequences worth anticipating.
| Situation | What happens |
|---|---|
| Full transfer | The account is closed after the assets move, and any closure fee applies |
| Partial transfer | The account remains open, potentially with a maintenance fee |
| Residual dividends | Payments on transferred positions can arrive at the old firm and are swept over later |
| An account left at zero | May be closed automatically after a period, or may sit dormant |
The third row is routine and slow. A dividend with a record date before the transfer is paid to the account that held the shares then, and the delivering firm forwards it, sometimes weeks later.
It is worth checking the old account for a month or two after a transfer completes. Residual cash, forwarded dividends and a final tax document all arrive there rather than at the new firm.