Transfer vs Sale

[heartky]

If one tranfers cash from one brokerage firm to another does it make a difference whether it is recorded a transfer or sale? If transfer what is recorded as OOP?

[Mark]

Hi heartky,

In the case of cash investments it doesn't really matter whether you use a transfer or a sale. The difference between a transfer and a sale is that the transfer transaction is excluded from the capital gains report. Usually though, cash accounts are also excluded from capital gains reports, so it doesn't really matter if you use transfer or sale when moving money out of cash investments. Transfers and sales are treated the same when calculating return on investment yields.

When you transfer out, your Out Of Pocket (OOP) cost is reduced by the OOP cost of what you transferred out. Fund Manager figures this out for you automatically. When you transfer in, you specify the OOP cost for the transferred in shares. When you use the "Transfer Between" wizard, Fund Manager assigns the transfer in OOP cost to be the same as the OOP cost you transferred out.