How to Transfer Stocks
Without Selling

In-kind means no sale — and no sale means no tax

Transferring stocks without selling means moving the actual shares — not cash proceeds — from one account to another. Under US tax law, this is called an 'in-kind' transfer. Because no sale occurs, no capital gain or loss is recognized, no 1099-B is generated, and your cost basis carries over to the receiving account. The IRS treats it as though nothing happened — you still own the same shares, just in a different location.

This matters most for investors with large unrealized gains. If you hold $2M of NVDA with a $200K cost basis, selling to move cash would trigger approximately $342K in federal and state capital gains tax (at 20% federal + 3.8% NIIT + state rates). Transferring in-kind: $0 tax. The shares move; the tax obligation does not arise.

Full or partial account transfers between brokerages

ACATS is the standard method for transferring securities between US brokerage firms. It is governed by FINRA Rule 11870 and processed through NSCC. The receiving firm initiates the transfer — you never need to contact your old broker directly.

Moving individual positions — faster than ACATS

A DTC free delivery transfers a specific security position between two DTC participant accounts. Unlike ACATS, it moves only the shares you specify — not your entire account. Settlement is T+1 (one business day) under SEC Rule 15c6-1, effective May 28, 2024.

DTC delivery is the preferred method when you're moving a single concentrated position — faster than ACATS, and it doesn't freeze your entire account at the delivering firm. This is the method used when contributing shares to a partnership or SPV structure.

Moving stock into an income-generating partnership

Unlike the first two methods — which move shares between brokerage accounts you own — a §721(a) contribution moves shares into a partnership structure. Under IRC §721(a), no gain or loss is recognized when property is contributed to a partnership in exchange for a partnership interest. This is the mechanism that enables Embark's SPV to accept concentrated stock without triggering capital gains.

The structural difference is important: after an ACATS or DTC transfer, you still hold individual shares at a brokerage. After a §721(a) contribution, you hold a partnership interest — which entitles you to distributions from the partnership's income-generating activities on the contributed stock. The shares don't sit idle. They work.

How your basis transfers across each method

Your cost basis — the original purchase price plus adjustments — determines your capital gains tax when you eventually sell. Every in-kind transfer method preserves this basis, but through different legal mechanisms.

For securities acquired after January 1, 2011, brokerages are required to transfer cost basis data electronically. For older ('noncovered') securities, you are responsible for maintaining your own records. When contributing to a partnership, provide your cost basis documentation to the partnership's tax preparer to ensure accurate K-1 reporting.

Not everything moves in-kind

Most publicly traded securities transfer in-kind without issue. But certain asset types cannot be moved via ACATS or DTC — they must be liquidated (sold) or handled through alternative processes.

If your delivering brokerage must liquidate positions that cannot transfer, those sales will appear on your 1099-B. Plan ahead: if you hold nontransferable assets, decide whether to sell them before or during the transfer process to control timing and tax lot selection.

Frequently Asked Questions

Will transferring stocks trigger a wash sale?

No. A wash sale under IRC §1091 occurs only when you sell a security at a loss and repurchase a substantially identical security within 30 days before or after the sale. An in-kind transfer — whether via ACATS, DTC, or §721(a) contribution — does not involve a sale. The shares move; they are not sold and repurchased. However, if you sell a position at a loss at one broker and then buy the same security at another broker within the 61-day wash sale window, the wash sale rule does apply across accounts.

Can I transfer just some of my shares, not the whole account?

Yes. ACATS supports partial transfers — you specify which assets to move, and only those assets transfer. This is sometimes called a 'specifically designated' transfer under FINRA Rule 11870. DTC delivery is inherently partial — you specify the exact security and quantity. For §721(a) contributions to Embark's SPV, you choose how many shares to contribute. There is no requirement to move your entire position. Many investors contribute a portion of their concentrated holdings while maintaining some shares in their personal account.

How do I verify my cost basis transferred correctly?

After the transfer settles, log into the receiving firm's platform and check the cost basis for each transferred position. Compare it against your records or a recent statement from the delivering firm. For covered securities (stocks acquired after January 1, 2011), the basis should transfer automatically via the CBRS system within a few business days of settlement. For noncovered securities, you may need to manually enter your cost basis at the receiving firm. If discrepancies exist, contact the receiving firm immediately — correcting basis data early avoids problems at tax time.

What is the fastest way to transfer stocks without selling?

DTC free delivery is the fastest method — settling in T+1 (one business day) under current SEC rules. ACATS takes 4–6 business days for full account transfers. If you need to move a single position quickly — for example, to contribute concentrated stock to an Embark SPV — request a DTC free delivery from your brokerage. You will need the receiving firm's DTC participant number and account number. Most brokerages process DTC delivery requests within one business day of receiving complete instructions.