How to close a brokerage account
Last updated August 2026
Short answer
The expensive mistake is treating this like closing a bank account, where emptying it and walking away costs nothing.
Transfer rather than sell
A full ACATS transfer moves the securities to the new broker and closes the old account when it completes.
Nothing is sold, so nothing is realised, and you are never out of the market.
Selling instead turns every unrealised gain into a taxable one in a single year, which for a long-held portfolio can be a very large number.
Download everything first
Statements for every year, the full trade history, and a cost basis report showing each lot with its acquisition date.
Access to historical documents frequently ends when the account closes, and support requests afterwards are slow.
Basis is the record that matters most, because it determines the tax on every future sale of the transferred positions.
Before you initiate
Cancel open orders, recurring investments and automatic transfers, which can otherwise fail mid-process.
Note anything that cannot transfer: proprietary funds, unusual share classes and fractional shares.
Settle any margin balance, since a debit cannot simply move with the account.
Try it in Walnut
Walnut connects to your brokerage and reads what you hold, so after a move you can confirm the positions arrived as expected.
Fees and fractions
Outgoing transfer fees are common, frequently around $75 to $100, and many receiving brokers reimburse them on request.
Fractional shares are liquidated because they cannot move, which realises small gains or losses in a taxable account.
For a portfolio built entirely from fractional purchases, that liquidation can be more than incidental, so it is worth estimating first.
Retirement accounts are different
Transferring an IRA to another custodian is not a taxable event and can be done as often as you like.
Closing an IRA by withdrawing the money is a distribution: taxable, and generally subject to the 10% additional tax before 59.5.
The word close therefore means two entirely different things depending on the account type, and conflating them is expensive.
After closure
Confirm the balance is zero and request written confirmation that the account is closed.
Keep your address current with the old broker until the final 1099 has arrived.
Check the following January that the tax form covers the closing year, since a missing form is the most common loose end.
Closing an account you inherited or share
A joint account generally requires both holders to agree, and the surviving holder on a survivorship account usually re-registers rather than closes it.
An inherited account has its own process and its own basis rules, since assets typically receive a step-up to the value at the date of death.
In both cases, getting the registration handled before any selling protects a basis adjustment that is worth more than the convenience of closing quickly.
Sources
The account transfer process is described by FINRA at Transferring Your Brokerage Account. Cost basis reporting and the tax treatment of sales are in IRS Publication 550, with IRA distribution rules in Publication 590-B. Walnut is informational and is not an investment adviser. This guide is educational and not personalized tax advice.
FAQ
How do I close a brokerage account?
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Either transfer the holdings to another broker, which closes the account as part of a full ACATS transfer, or sell everything and withdraw the cash. The transfer route avoids realising gains and is almost always better in a taxable account.
Should I sell first or transfer?
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Transfer, unless you actually want to sell. Selling in a taxable account realises capital gains and creates a tax bill that closing an account does not otherwise require. Inside an IRA it makes no tax difference.
What should I download first?
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Full statements, the complete trade history and a cost basis report showing lots and acquisition dates. Access frequently ends when the account closes, and reconstructing basis afterwards is slow and sometimes impossible.
Will I still get a tax form?
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Yes. The broker issues a 1099 for the year covering activity before closure, including any sales made on the way out. Make sure they have a current address, since a closed account is a common reason a form goes missing.
Is there a fee?
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Often, for a full transfer out, commonly around $75 to $100. Selling and withdrawing cash usually avoids it, though the tax on realised gains is normally larger than the fee.
Can I close an IRA the same way?
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You can transfer it to another custodian, which is not a taxable event. Closing it by taking the money out is a distribution, taxable and generally penalised before 59.5, which is a very different action from closing a taxable account.
Do I need to close it at all?
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Often not. An empty account with no fees costs nothing to leave open, and keeping it preserves access to historical statements. Closing matters when the broker charges inactivity fees or you want to reduce the number of accounts holding your data.
What about an inherited or joint account?
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Both have their own process. A joint account usually requires agreement from both holders, and a survivorship account is re-registered rather than closed. Inherited accounts carry a basis step-up to the date-of-death value, so handling registration before any sale protects that adjustment.