Can I get around PDT rule by moving long term investments?

[deaddog]

Hi, So I have 2 accounts. One at broker X and another at Y. I use broker X only for long term investments, things I would never sell any time soon. In broker Y, I only have cash for day trading.

Unfortunately, Y is a margin account and has less than 25k triggering the PDT rule. Does the PDT rule require all of the 25k to be cash? Because what I was thinking was moving some of my equities from X to Y (basically I will sell equities in X and buy the same long-term equities in Y).

My question is simple: Can the 25k requirement in Y be partially longer term equities and partially cash I can use for day-trading? Follow-up question: What happens if the longer-term equities drop in value?

Thanks for any help.

As long as you have 25k in cash and equities in your account the PDT rule doesn't apply.

Rather than transfer I'd move cash. Sell in one account and deposit cash in the trading account then buy stock back. If you have a tax concern you can transfer in kind but be aware that there may be a time period where you won't be able to trade. Good opportunity to rebalance and get rid of some losers.

 

[joeltrades]

As long as you have 25k in cash and equities in your account the PDT rule doesn't apply.

Rather than transfer I'd move cash. Sell in one account and deposit cash in the trading account then buy stock back. If you have a tax concern you can transfer in kind but be aware that there may be a time period where you won't be able to trade. Good opportunity to rebalance and get rid of some losers.

The period to not trade is sort of short so I don't care. I'll transfer in kind. Thanks!

 

[joeltrades]

As long as you have 25k in cash and equities in your account the PDT rule doesn't apply.

Rather than transfer I'd move cash. Sell in one account and deposit cash in the trading account then buy stock back. If you have a tax concern you can transfer in kind but be aware that there may be a time period where you won't be able to trade. Good opportunity to rebalance and get rid of some losers.

Also I don't have enough losers to make up the PDT so rebalancing alone won't get me there. Thanks though!

 

[yc47ib]

Just do a broker to broker transfer so there will be no tax consequences.

 

[tiddlywinks]

If you transfer assets OTHER THAN CASH, be sure YOU maintain cost basis documentation!!

The receiving broker will know NOTHING about the cost basis of transferred assets, which will be necessary for tax purposes.

 

[Sig]

Just do a broker to broker transfer so there will be no tax consequences.

Sounds like you're stuck doing that. Just be aware that in my experience at least the losing broker isn't in any hurry about making this happen or responsive when you ask them where the process stands. So I'll back up the other posts saying to beware that those stocks may be stuck in a limbo where you can't sell them for a not insignificant amount of time.

 

[murray t turtle]

Sounds like you're stuck doing that. Just be aware that in my experience at least the losing broker isn't in any hurry about making this happen or responsive when you ask them where the process stands. So I'll back up the other posts saying to beware that those stocks may be stuck in a limbo where you can't sell them for a not insignificant amount of time.

%%
Most likely right;
so ask the benefiting broker + expect not to sell anything once the transfer starts. SCHW said 4 weeks or more. AFTER 4 weeks i asked about transfer,SCHW said ''we have no record of that '' / Good thing i was mostly long, in a bull market.[Actually SCHW did not forbid selling during transfer , but since it may delay/HAY glad i did not]
I then used a FAX instead of an online form only /transferred to SCHW same week.
NO bitcon \i mean bitcoin\ tranfers into SCHW \,