IMPORTANT NOTE: This article has been customized for use by self-directed Individual Retirement Account (IRA) owners for information purposes only. Persons are encouraged to consult a qualified tax professional with the investments and elections within the IRA. IB does not provide tax advice. For detailed information regarding IRAs, you may consult the IRS Publication 590-A about IRA contributions and the IRS Publication 590-B about IRA distributions.
This resource center provides a central reference point for information concerning the various IRA account types offered by IB.
Important Notice - Select IRA Tax Reporting for key information with transaction and tax reporting in your IRA.
Account Management IRA Reference
Beneficiary Options
Recharacterizations from a Roth IRA
Required Minimum Distributions
IRS Circular 230 Notice: These statements are provided for information purposes only, are not intended to constitute tax advice which may be relied upon to avoid penalties under any federal, state, local or other tax statutes or regulations, and do not resolve any tax issues in your favor.
This information is for general educational purposes only. Individuals should consult with their financial adviser or legal counsel to determine how rollover regulations affect their unique situations.
Generally, an IRA rollover is a tax-free distribution to you of cash or other assets from one retirement plan that you contribute to another retirement plan. The contribution to the second retirement plan is called a rollover contribution.
This article outlines the types of IRA rollover transactions, rules and conditions, IB's Rollover Certification form, and rollover transaction details. Select from list below for details:
Eligible Rollover Transactions
Prior to completing an IRA Rollover transaction, we recommend that you review the rules and conditions surrounding eligibility. Interactive Brokers can accept as a tax-free transaction an eligible rollover distribution as defined under the Internal Revenue Code. Included in this article is information about eligible transactions, as well as the Interactive Brokers IRA Rollover Certification form.
Before accepting an IRA rollover transaction into an Interactive Brokers LLC IRA, we require that you review your eligibility for the rollover and certify your understanding of the rollover rules and conditions. The IRA Rollover Form includes the IRA Rollover Certification.
The Fund Transfers page within the Account Management lets you notify IB of an IRA Rollover deposit of funds into your account. Select the Funding tab in the header link and choose Deposit Funds in the Transaction list. In the Method list, select Direct Rollover. Complete, sign, and return both forms to the Interactive Brokers address listed on the form.
Two types of IRA rollover transactions exist with different guidelines and delivery methods:
(Note: A distributions directly from one IRA trustee to another IRA trustee is a Trustee-to-Trustee transfer. It is not affected by the twelve-month waiting period.)
For additional information about rollovers, visit Understanding Rollovers. See also IRS Publication 590-A, Contributions to Individual Retirement Arrangements (IRAs) for more specific guidelines on moving retirement plan assets.
Almost any distribution from a qualified plan can be rolled over to an IRA. Your retirement account may be eligible for one of the following eligible rollover transactions.
Traditional IRA or SIMPLE IRA to Traditional IRA Rollover
Roth IRA to Roth IRA Rollover
Rollover or Direct Rollover from Qualified Plan into a Traditional IRA
Roth IRA to Roth IRA Rollover
Some funds distributed from a retirement plan are not eligible for rollover into an IRA. The following transactions are not eligible rollover transactions.
Click here to return to the Retirement Account Resource page.
Disclaimer: IB does not provide tax advice. These statements are provided for information purposes only, are not intended to constitute tax advice which may be relied upon to avoid penalties under any international, federal, state, local or other tax statutes or regulations, and do not resolve any tax issues in your favor. We recommend that you consult a qualified tax adviser or refer to the U.S. Internal Revenue Service.
Interactive Brokers allows you to send us a copy of a document even if you do not currently have access to a scanner. You can take a picture of the requested document with your smartphone.
Below you will find the instructions on how to take a picture and send it to IB per email with the fllowing smartphone operating systems:
Android (i.e. Samsung Galaxy, HTC One X, Sony Xperia, Motorola Droid)
Windows Phone (i.e. Nokia Lumia, HTC Titan, Samsung Focus)
If you already know how to do so, please consult the instructions about the information you will need to send us aside from the document picture. Click HERE - Where to send the email to and what to include in the subject.
iOS
1. Press the power button to turn your iPhone screen on. Tap, hold and slide upwards the
Camera icon on the bottom right of your screen then drag it upwards to access the Camera.
- If you do not have the Camera icon, you may access the Camera app from the home screen
of your iPhone.
2. Place your iPhone above the document and take the desired portion or page of the document
and tap on the Camera button (designated with 1 on the below illustration - Fig. 3) to take a
photo. Then you need to access the picture - tap the image in the lower left-hand corner (number 2 in the
illustration)
3. Exit to the home screen by pressing the round Home button on the face of the iPhone.
4. Open the Photos app
5. Next, tap the album ‘Camera Roll’. Make sure that the picture is clear and the document
is well legible, if it isn’t, please repeat the previous two steps.
6. Touch once the picture to make the menus appear and tap the share icon
designated with 1 in the illustration below.
5. Select the first option - Email Photo. Please consult the following instructions for the next step - what address you should send the picture to and what else to include aside from the document, HERE.
Note: to send emails your phone has to be configured for that. Please contact your email
provider if you are not familiar with this procedure.
Android
1. Open your applications list and start the camera app. Depending on your phone model, make or setup it might be called differently.
2. Place your phone over the document and take the desired portion or page of the document and
tap the icon for the camera. (The generic button will look like the one shown below.)
3. Press the Home key to go back to the idle screen. Go back to the apps list and start the Gallery
application. On some phones it may be called Pictures or Photos.
4. Open the album called Camera or All pictures. The last image in either of those should be the
document you just took a picture of. Tap the screen once to bring up the buttons and tap the share
icon, which generically should look as shown below.
5. In the sharing menu that will be displayed now tap on Email. Please consult the following instructions for the next step - what address you should send the picture to and what else to include aside from the document, HERE.
Note: to send emails your phone has to be configured for that. Please contact your email
provider if you are not familiar with this procedure.
Windows Phone
1. Press the camera button in the Desktop menu of Windows phone. (If you do
not see the camera in the desktop menu, please scroll to the right and choose
camera in the listed applications)
2. Take a picture by pressing the trigger button on the side of the phone.
3. Open the picture by scrolling to the left and press the ‘...’ menu item
at the bottom task bar to see the available options.
4. Please choose send and the configured Email account you would like to use.
5. In the upcoming email, please add the destination email address, the
subject and the text you would like to send and press the ‘Send email’ button in
the bottom menu. Please consult the following instructions for the next step - what address you should send the picture to and what else to include aside from the document, HERE.
Note: to send emails your phone has to be configured for that. Please contact your email
provider if you are not familiar with this procedure.
WHERE TO SEND THE EMAIL AND WHAT TO INCLUDE IN THE SUBJECT
The email has to be created observing the below instructions:
1. In the ‘To:’ field type...
a. newaccounts@interactivebrokers.com if your you are a resident of a non-European country
b. newaccounts.uk@interactivebrokers.co.uk if you are a European resident
2. The subject field must contain all of the below:
a. Your account number (it usually has the format Uxxxxxxx, where x are numbers) or your
username
b. The purpose of sending the document. Please use the below convention:
i. PoRes for a proof of residential address
ii. PID for a proof of identity
These regulations further require that all securities transactions be effected and margined in the securities segment of the Universal account and commodities transactions in the commodities segment.1 While the regulations allow for the custody of fully-paid securities positions in the commodities segment as margin collateral, IB does not do so, thereby limiting their hypothecation to the more restrictive rules of the SEC. Given the regulations and policies which direct the decision to hold positions in one segment vs. the other, cash remains the only asset eligible to be transferred between the two and for which customer discretion is provided.
Outlined below is a discussion as to the cash sweep options offered, the process for selecting an option as well as selection considerations.
You may then select the radio button alongside the option of your choice and select the Continue button. Your choice will take effect as of the next business day and will remain in effect until a different option has been selected. Note that subject to the trading permission settings noted above, there is no restriction upon when or how often you may change your sweep method.
IB provides Canadian residents a variety of ways to deposit funds into their IB account including wire transfer, electronic funds transfer and Bill Payment. Canadian Bill Payment is a particular form of electronic funds transfer which allows for the transfer of funds into your IB account via an online payment service provided by your financial institution (usually through a checking account).
To initiate a Bill Payment you will first need to log into your online banking website, select Bill Payment and add Interactive Brokers Canada as a payee along with your IB account ID (typically begins with the letter 'U'). Depending upon your particular financial institution and whether IB is recognized as one of their program participants, your institution will likely indicate an expected delivery date of 1-2 business days for transfers.
Once IB has been set up as a payee, you may initiate transfers through your bank by selecting IB as a recipient and establishing the payment (deposit) amount and delivery date. After instructing your bank to initiate the transfer, it's important that you log into your IB account and create a deposit notification. This notification ensures that the funds will be properly matched and credited to your account upon arrival and not held in suspense. To create a deposit notification, select the Funds Management and then Funds Transfers menu options from Account Management. Then select Deposit Funds from the Transaction drop-down list, Bill Payment from the Method drop-down list and Proceed with Transaction from the Instruction drop-down list. You'll then be prompted to enter the amount of your deposit and the sending institution.
A key benefit to using Bill Payment is that funds are credited to your account immediately upon arrival and are available for withdrawal 3 business days thereafter. This is in contrast to regular electronic funds transfers which are subject to a 4 business day hold prior to being credited to your account and have restrictions if withdrawn to an institution other than that from which the funds originated. Most Canadian financial institutions offer the ability to remit funds via Bill Payment to Interactive Brokers Canada.
Statement and Year End Reporting for US persons and entities comprises the following:
1. Cost Basis: While the required reporting schedule was staggered, the primary cost basis that will be reported to the IRS includes equities bought and sold after December 31, 2010. This includes the adjusted cost basis resulting from wash sales and corporate actions.
The future phase-in period for broker reporting includes the assets sold on or after the following dates:
--- Mutual Funds and ETFS - 1/1/2012
--- Simple debt instruments (i.e. treasuries, fixed-rate bonds & municipal bonds) and options, - 1/1/2014
--- Other debt instruments - 1/1/2016
2. Tax Basis Method: Brokers are required to use the method first in, first out (FIFO), unless given other instructions by an investor. Changes to your tax basis method may be submitted through the Tax Optimizer. The Tax Optimizer is launched from within Account Management and is available for stock, option, bond, warrant and single-stock future trades.
IB offers multiple tax basis methods, including three basic options:
● First In, First Out (FIFO) - This is the default option. FIFO assumes that the oldest security in inventory is matched to the most recently sold security.
● Last In, First Out (LIFO) - LIFO assumes that the newest security acquired is sold first.
● Specific Lot - Lets you see all of your tax lots and closing trades, then manually match lots to trades. Specific Lot is not available as the Account Default Match Method.
Tax Optimizer also lets you select the following additional derivatives of the specific identification method.
● Highest Cost (HC), Maximize Long-Term Gain (MLTG), Maximize Long-Term Loss (MLTG), Maximize Short-Term Gain (MSTG), and Maximize Short-Term Loss(MSTL).
For complete instructions on using the Tax Optimizer and details on the lot-matching algorithms for each method, see the Tax Optimizer Users Guide.
Note: Changing your tax basis is effective immediately. The basis selected will be applied to all subsequent trades on the account statements and tax reports. Updates will not affect previously closed trades nor the TWS profit and loss data displayed.
3. Gain & Loss Categories: An additional requirement to the cost basis reporting is the capital gain or loss category. The gain or loss category of equities is determined by the length of time in which the security was held, known as the "holding period."
● Short-Term - Holding periods of one year or less are categorized as "short-term."
● Long-Term - Holding periods over one year are categorized as "long-term."
The following statements and reports display cost basis information that will be reported on Form 1099-B for eligible accounts.
For a complete review of the tax information and year end reporting available, click here.
Note: Unlike the Account Statements, the Gain & Loss Worksheet for Form 8949 may consolidate sell trades. The cost basis will be adjusted, as required for 1099-B reporting.
U.S. legislation from 2008 included new guidelines for tax reporting by U.S. financial institutions. Effective January 2011, U.S. Brokers are required to report cost basis on sold assets, whether or not a gain/loss is short-term (held one year or less) or long-term (held more than one year). U.S. brokerage firms, Interactive Brokers LLC (IB) included, implemented changes to comply with the legislation.
For more information on cost basis with asset transfers, see Cost Basis & Asset Transfers.
Disclaimer: IB does not provide tax advice. These statements are provided for information purposes only, are not intended to constitute tax advice which may be relied upon to avoid penalties under any international, federal, state, local or other tax statutes or regulations, and do not resolve any tax issues in your favor. We recommend that you consult a qualified tax adviser or refer to the U.S. Internal Revenue Service.
Understanding the basic facts about transferring accounts between US brokerage firms can be help to avoid delays. Through this article and other Knowledge Database resources, Interactive Brokers seeks to assist with your incoming and outgoing ACATS requests.
US brokerage firms utilize a standardized system to transfer customer accounts from one firm to another. Known as the Automated Customer Account Transfer Service or ACATS, the process allows assets to move seamlessly between brokerage firms in a unified time frame. ACATS transfers are facilitated by a third party, the National Securities Clearing Corporation (NSCC), to assist participating members with timely asset transfers.
The majority of assets may be transferred between US brokerage firms and some banks through ACATS. This standardized system includes stocks, US corporate bonds, listed options, unit investment trusts, mutual funds, and cash. Information on assets eligible for transfer is provided at "Assets Eligible..." Though impacted by multiple factors and time constraints, the accepted or rejected transfers finalize within 10 business days in most cases.
4 simple steps of the ACATS process will help you understand the flow and minimize delays. Familiarizing yourself with the transfer process helps to ensure a successful transition.
The financial institution that is receiving your assets and account transfer is known as the "receiving firm." Investors always work with and through the "receiving firm" to move full or partial account assets into a new broker.
Contact the "receiving firm" (Interactive Brokers) to review the firm's trading policies and requirements. You should verify that your assets are eligible for trading at the "receiving firm" before initiating the transfer request. Not all ACATS transferable assets are acceptable for trading at every brokerage firm.
All outgoing ACATS transfers, full or partial, must be approved by the "delivering firm." Investors, however, should work with and through the "receiving firm" in order to begin the the transfer process or to status the progress of the request.
Investors must always begin the ACATS transfer with the "receiving firm." An ACATS transfer form or Transfer Initiation Form (TIF) must be submitted. The "receiving firm" takes your reqeust and communicates with the "delivering firm" via ACATS. The process begins with this request for transfer of the account.
For your Interactive Brokers Account, the transfer is usually submitted online. Video instruction on submitting the transfer is provided at "How to deposit funds via a full ACATS/ATON Transfer." or through Step-by-step instructions.
Note: Outgoing account transfers from your IB account should be directed to the other broker. Your request will be submitted to IB from the other broker through the ACATS electronically.
Brokers ensure the safety and security of transfer requests by only authorizing requests between open accounts that meet the following criteria:
Ultimately responsible for validating the transfer, the "delivering firm" may accept information from the "receiving firm" correcting data originally entered. Approved or validated requests result in the delivery of positions to the "receiving firm" for their acceptance. Assets may not be accepted by the "receiving firm" for the following:
Note: The most common reasons for ACATS rejections are outlined by clicking here.
The processing time for each transfer request is fixed. In general, approved transfers complete within 4 to 8 business days. Almost all transfers complete within 10 business days. Each firm is required to perform certain steps at specific intervals in the process. Feel free to review the Full ACATS transfer process flow.
While Interactive Brokers does not charge a fee to transfer your account via ACATS, some brokers do apply a fee for full and partial transfers. Prior to initiating your transfer, you should contact the "delivering firm" to verify any charge.
Interactive Brokers Customer Service stands poised to assist with your incoming ACATS transfer reqeust. Click here for Customer Service contact resources.
Note: Outgoing or ACATS transfers sending accounts to another broker should be directed to the "receiving firm." Their Account Transfer Group will work with Interactive Brokers directly to complete your outgoing request.
While applicants are required to provide IB with notification as to the amount they intend to fund their account with and the manner in which they fund the account in order to have the application considered for approval, there is no requirement that the funding actually take place prior to approval.
Applicants may nevertheless elect to remit funds via wire, check or electronic funds transfer (e.g., ACH, EFT) prior to receiving confirmation of account approval in an effort to accelerate commencement of any credit hold period. It should be noted, however, that deposits received prior to account approval are held in suspense and are not credited to the account nor eligible to accrue interest until the application has been approved. In the case where the applicant has authorized IB to fund the account via asset transfer (e.g., ACATS, ATON) from another broker, IB will not initiate the transfer until the application has been approved.
How to deposit funds to your Interactive Brokers account via a full ACATS/ATON Transfer
For information on how to initiate a partial ACATS/ATON transfer/ please click here
For Interactive Brokers tradeable products please visit the Contract Search Engine
For a detailed description of the Full ACATS/ATON process flow please click here
For a list of the most common causes for ACATS/ATON rejects, please click here
How to deposit funds to your Interactive Brokers account via a Check