If you’ll reach age 70-1/2 this year (or if you already have reached that age), you must take minimum distributions from your IRA or other tax-deferred retirement plan. In that case, you may want to take the distribution now rather than waiting for a deadline. In addition, you can take the distribution in stock rather than cash.
Suppose, for example, you must take at least a $20,000 distribution from your IRA this year. Instead of cash, you can pull out $20,000 worth of stocks that are sharply reduced from their highest prices.
Subsequent appreciation may be taxed at favorable capital gains rates as low as 8 percent. Also, stocks that you retain may be passed on to your heirs with a basis step-up, eliminating taxes on gains during your lifetime, depending on future tax law.