OK guys. I’m here to clarify the FUD/confusion about DRSing your IRA shares, using Ally/Apex as custodian, and beneficially owned shares vs DRS’ed one’s.
reddit.com/gallery/reauv5
reddit.comPosted Dec 11, 2021, 10:49 PM UTC
12342
reddit.comThanks for going through. The system is rotten and so complex. The gist I get is this:
-
Going from your broker IRA to CS IRA is not a taxable event as you aren’t selling - it’s a transfer.
-
The custodian of your IRA shares is the broker from which you transferred. This means it’s not under your name and they can still sell your shares as long as they meet CS requirements. How many? And what are they? I’ll have to look into it.
-
Going through the process the CS rep says (transfermystock) converts the IRA into your name.
9
As far as I understand it from the CS rep, yes on all 3. As always, be sure to double check with CS.
7
I thought the other guy with the hand written letter of instruction (sorry their name slips me) said the "requirements" included a signature from the custodian AND the shareholder.
2
Look at the third picture again. They can do everything on their own end. It requires a signature from an officer authorized to conduct transactions on behalf of the company, and a second signature.
Now this is where I am making an assumption: this second signature can be anyone qualified within Ally. Again, this is my conjecture, BECAUSE I asked the question if they can sell without my permission.
The CS rep said YES, they can sell and do everything "on my behalf" without my permission, as my custodian of shares under my name. I imagine it goes something like this:
Ally: Wsup Fidelity, it's your brosef from Ally here.
Fidelity: Yo what's good
Ally: Nm nm, btw PM_ME_DANK_PEENS said he wants to sell his GME shares.
Fidelity: Oh really? ;) ;)
Ally: Yeah we got two signatures from our guys. But he really does want to sell these shares. Trust me bro.
Fidelity: Lol aight send that shit, let's get this bitch done
I've read others' posts regarding this (/u/youniversawme u/winebutch), and I'm not sure if it is FUD or simple misinformation/lack of follow-up to triple-check that everything is ok, but you cannot trust that Ally will require your signature or permission to sell.
It seems that when u/azurefenrir asks for a follow-up screenshot with a CS representative, the conversation goes flat. People insist that if fuckery were to happen with Ally, that they would politely ask for your permission, and you have full control to cancel it. You do not have control. This was answered by my chat with the CS rep. If there is a conflicting answer DIRECTLY FROM CS, definitely let me know and post proof.
#You are missing that final step, which is to send CS that General Transfer Form, or using their Transfer Wizard, to officially move your IRA shares from being "beneficially owned with Ally as your custodian", to being officially registered under your name.
10
Oh my fucking god...I hope it's not too late to save those IRA shares before Ally sells them all away...
I'll be adding this discussion to future posts and update the current one, I'll make sure to highlight this in future posts
5
Yeah, I’m not convinced that custodians DRS the shares they hold on behalf of the IRA beneficiary. Can they prove it? How can they prove it?
6
The Ally rep just told me they were. But it looks like that’s untrue. He also told me my LOI was received and being processed. I didn’t receive any confirmation of this. Not even in their website’s inbox. I asked for a confirmation number, he said it would be emailed. Guess what? It’s been a day and it’s not in my email. Shady motherfuckers.
I’m going to be calling to lodge a complaint and get that confirmation number.
9
“Trust me, bro.”, right?
Yeah, Ally was my first broker, and I still have an account there (with remnant GME shares).
Don’t like that they don’t offer IEX and use Apex. Still don’t hate them though.
6
Coment for visibility.for ira apes
6
Thanks for sharing proof of the claims! no ban for you! XD
6
Of course. Accuracy above everything else. Notice how I copy pasted your question in the chat? ;)
3
😳
2
This is excellent DD ape.
Is your understanding that using the transfer to get your shares out of the Ally IRA is moving them into a separate IRA controlled only by you, or moving them out of an IRA altogether (and taking the tax and penalty hit in the process)?
That’s what’s not clear to me.
5
It is moved into an IRA with CS, therefore it is a transfer. You have not made a sale, and so there is no tax penalty.
If you take an in-kind distribution from your Fidelity IRA or make a sale from your IRAs, then you pay the tax penalty. Same deal for selling from CS IRA, it is taxed.
Best to sell next year, then you handle the taxes on April 2023. Unless you have the funds to handle the taxes this coming April 2022, then you can do whatever. This is my current understanding regarding these topics. Not financial advice.
8
Sorry. I’m a dumb ape, trying to ensure I understand the end result due to the tax implications of early withdrawal from an IRA. This has huge implications for a lot of us individual apes doing our own independent dd.
You are saying that you moved IRA shares from Fidelity to an Ally self-directed IRA and you DRSed those shares at Ally to CS. Problem was self-directed IRA shares apparently still allows Ally control of your shares per the CS rep you chatted with. Followed that.
Are you saying that once you complete CS’s transfer form as described, that your understanding is those shares will:
(A) still be in an IRA (at CS)
-or-
(B) withdrawn out of an IRA (at CS) (aka a taxable event)?
Thx ape!
5
A, you have only transferred your IRA shares into other IRAs, all that's changed when you submit the form, is that your IRA shares are no longer under DTCC and now under CS, AKA your name. When you make a sale, it is then a taxable event.
7
Awesome. Thx for the reply good sir ape. This is awesome news. Huge news.
6
Holy shit, this is awesome, great find! I've been holding off on transferring my IRA shares because of the confusion surrounding the custodians. It sounds like using the transfer website the CS rep mentioned, I could just transfer my IRA shares at fidelity to an IRA account with CS, right? That surprises me, I thought we had determined they didn't directly support IRA accounts, hence the necessity for a custodian?
2
Commenting for visibility.
5
This is huge. I'm on the same step, hope this works! Thabks!
5
Hi OP,
I want to DRS my Fidelity IRA shares, but Fidelity says it would be a taxable event and chatting with CS they suggested I talk with my tax advisor. I asked if I could just open an IRA account and transfer like for like and they never replied.
Not trying to promote FUD, just not getting help from either party.
I appreciate any help that can be shared.
4
Right, If you were to take an in-kind distribution from your Fid IRA, you are withdrawing your shares and moving them into a Fid brokerage account. They are then just like any other share in your account. This is taxable.
I went the Ally/custodian route, transferring my IRA to an IRA with Ally. From there, Ally’s IRA to CS’s IRA. There is a $150 transfer fee (fid to Ally), which can be waived. From youniversawme’s post it doesn’t seem to be a taxable event until you sell- which I’m waiting to do next year at the very least, to delay handling taxes.
2
I got you fan with the guide :)
This is how they do it with examples.
Follow a share with me here
3
IMPORTANT POST LINKS
What is DRS and why should you care? || What is GME and why should I consider investing? || What can I do to support the company and local communities
Please help us determine if this post deserves a place on r/Superstonk. Learn more about this bot and why we are using it here
If this post deserves a place on r/Superstonk, UPVOTE this comment!!
If this post should not be here or or is a repost, DOWNVOTE This comment!
1
Doing Gods work here. Up ya go🚀🚀🚀🚀🚀
1
Also see https://old.reddit.com/r/Superstonk/comments/rc9pho/yalol_ftddddd_yet_another_list_of_links_for_the/hnyvlpn/ if still confused, and become even more confused too
1
Would Transferwizard allow me to move my IRA directly from Fidelity to CS?
1
It's the same old shite.
The OG u/youniversawme covered this.
1.if Ally tried to sell, a letter would come to you letting you know, and you'd have a chance to stop it.
-
The custodian is currently required if you want to DRS an IRA. They are legally required to act as you direct.
-
The shares are removed from the DTCC. Again, covered by u/youniversawme.
-4
To begin, here is a chart made by CS explaining ownership and registration of shares:
https://www.computershare.com/us/becoming-a-registered-shareholder-in-us-listed-companies
I have a rollover traditional IRA with Fidelity. I transferred my IRA shares to Ally Invest, where I submitted a LOI (Letter of Instruction) to transfer those shares to Computershare.
I was on a call yesterday with an Ally representative. The agent claimed exactly the MISINFORMATION I've been seeing here. He claimed that once these shares are moved from Ally to CS, that Ally has no control over your shares, and that the shares are DRS'ed under your name, and out of DTCC/Cede's.
FROM MY CHAT WITH CS TODAY, THIS IS INCORRECT!
The CS representative confirmed with me that when the shares are moved from Ally to CS, they are still under the BENEFICIALLY-OWNED SHARES STATUS. This means that if the terms are met, Ally could sell my shares without my permission, or signature. Basically, they can do all of this ON THEIR OWN END, and sell my shares. I AM NOT THE OWNER OF MY SHARES.
So now that that's cleared up, wut do?
The CS rep informed me that I do not have to do a painstakingly slow reverse transfer back to Ally, then back to Fidelity, then an in-kind distribution, then a CS transfer, but instead, I can submit a General Transfer Form, or use the Transfer Wizard on their website (www.transfermystock.com).
To do it the other way, the form can be found here:
Go to www.computershare.com/investor. Click “Help” on the upper-right hand corner, and then click on Printable Forms. Then look for "General Transfer Package - US Holders".
Pics of chat for proof. I will be complaining about the Ally rep that misled me, intentional or not. This could have lost apes a significant amount of money.
TL;DR: Your IRA shares that were moved to Ally Invest, then into CS, are STILL NOT YOUR SHARES. THEY CAN SELL THESE WITHOUT YOUR SIGNATURE OR PERMISSION.
Once the shares are in CS, YOU MUST use Transfer Wizard, or fill out the form, both provided above. Only then are these out of DTCC/Cede's ownership, and finally under your name!
u/AzureFenrir u/kitties-plus-titties u/youniversawme u/winebutch
This looks like good stuff. Can you confirm if you are a US ape (I assume so since you mentioned Fidelity).
Yup, US here
Please update us as to whether or not this method works! I don’t have an IRA but I’ve seen so many posts by apes seeking help with information on this subject.
Thank you for doing the good lords work 🟣
Consolidated post of topic in discussion
https://www.reddit.com/r/Superstonk/comments/refbzp/your\_ira\_drsed\_shares\_held\_in\_custody\_are\_being/
I think the CS agent meant you can use the Transfer Wizard to transfer directly back to Fidelity, do the transfer in kind, then CS. 2 steps instead of 3, Ally-Fidelity-CS.
No, the agent confirmed that after processing the form, the shares should be under your name with a new account number on it. But definitely feel free to double check. We want to be accurate about these things.
Taxable event?
These IRA shares are just being moved into another IRA, from Ally to CS. They are still IRA shares, but the ownership is being changed. It is only a transfer so it is not a taxable event.
[deleted]