My spouse and I recently started receiving a yearly monetary gift from my parents, who use Morgan Stanley. For the first few years we took the gift in cash and put some of it toward funding our Roth IRA TDFs held in a Vanguard account. However, since my parents are in a higher tax bracket, it was determined it would be prudent for us to set up an E*Trade account and receive the gifts in the form of equities. The Morgan Stanley advisor allocated roughly half the gift to NVDA and GOOGL (25% each), with the remaining half allocated to a Vanguard Large Cap ETF. We received the funds earlier this week.
My wife and I would like to move some of the funds from this E*Trade account to our Vanguard account, but we are relatively new to investing and are unfamiliar with selling holdings. What is the best method for doing so in this case? Also, would it be best to only sell what's needed to fund the TDFs in the Vanguard account and leave the rest in the E*Trade account?
If you want to use the stocks for funding your Roth IRA, you'll have to sell them -- you can't transfer stock/shares into a Roth IRA. It has to go in as cash. So, being mindful of tax consequences, you can sell the shares, withdraw the money, and put it into your Roth IRA. If you want to keep the shares, but at Vanguard, you would open a brokerage account at Vanguard and work with the Vanguard transfer department to move the shares in-kind to your new Vanguard account.
Man o Man…How I Wished My Parents Did The Same For Me :(
You can do an ACATS transfer moving the shares from e-trade to Vanguard. You'll have to sell them to invest in what you want. You'll have to pay the taxes on them. Most likely they gifted you shares with fairly large gains, so you may want to sell some in 2025 and some in 2026 to spread the gains out. You can sell at e-trade and ACATS over both the remaining shares and cash or you can wait until the transfer goes through and sell at Vanguard.
Call Vanguard, they will do it for you.
Yes, ask Vanguard. They ought to be the first to be called, then ask people on Reddit.
Sell the shares in E*Trade. Wait for the cash to settle, then pull it into your Vanguard Roth. Max that out first. Since you’re in a lower tax bracket, the capital gains hit should be minimal—or zero if you’re lucky. Don’t overthink it. Cash is fungible; your retirement isn't. Get it done before the market corrects.