Moving Slices from one Pie to another changes both Pies. The account you’re moving Slices around in won’t experience trading as a result (no taxable events).
However, if you use either of those Pies in other accounts, the Pies in those accounts will also update. This may cause trading (taxable events) inside those other accounts, unless you take further action, discussed below.
Please note that you can’t move Slices between accounts, for example, from your M1 Individual Brokerage Account into your Traditional IRA.
Now here’s an example:
Let’s say you’re moving Slices from Pie A into Pie B inside your M1 Roth IRA. Trading won’t occur in your Roth IRA, because you’re just moving Slices inside that account.
But let’s say Pie A is also used inside your Individual Brokerage Account and Pie B is not. This account will experience a deletion of Slices, which will trigger sells during the next trade available window. These are taxable events. Sells happen because the Slices you moved out of Pie A aren’t moved within your Individual Brokerage Account, they’re just deleted from the Pie.
If you want to avoid those sells, you'll need to take further action before your next available trade window starts.
You’ll need to:
- Go into every other account with Pie A
- Add the Slices that were deleted back into Pie A and save Pie A
- Move the Slices out of Pie A to another Pie in the same account.
Doing this won’t impact the initial moves you made inside your Roth IRA.
Now let’s consider Pie B from the example above:
Let’s say Pie B is used in your Traditional IRA. Back in your Roth IRA, if what you’re moving into Pie B already exists in Pie B, we’ll combine the Slices. On the other hand, if what you’re moving doesn’t exist in Pie B in your Traditional IRA, you’ll now see Pie B with new Slices. If Auto-Invest is on, the next time you make a deposit and Pie B is underweight in your Traditional IRA, you’ll buy those new Slices.
Here’s another example:
Both Pie C and Pie D are used in your Individual Brokerage Account and Roth IRA. Let’s say you’re moving Slices from Pie C into Pie D inside your Roth IRA. The Slices won’t automatically shift from Pie C to Pie D in the Individual Brokerage Account. Separate buys and sells may occur to update each Pie during the next available trade window. To avoid this, you'll need to take further action before your next available trade window starts.
You’ll need to:
- Go to each account with Pie C
- Add the Slices you moved out of Pie C back into Pie C
- Move these Slices to Pie D within each account with Pie D
If you have any more questions about this process, please contact us.