Using a Roth IRA for CYDY shares

This is my first post so I thought a brief intro might be appropriate to keep from being tagged a short!! I am a retired engineer who did not discover CYDY until Covid broke. I have a good many shares (at least for a retiree who has not been in since sub-$1 days). I have followed three CYDY bulletin boards but this is the one I spend most of my time on. Thanks to the many knowledgeable posters who share their time and expertise. I wish I had some biomedical background/experience to share but I do not as my career was spent in a refinery. There is one item I have investigated, however, that might be of interest to some of you.

I am old enough that I have to take RMDs (Required Minimum Distributions) from my IRA. Back in my days of contributing to my IRA, Roth IRAs were not around (at least not in common use). I suspect most of you are familiar with Roths, but for those of you who are not: money is put into Roths on an after-tax basis as opposed to pre-tax like a conventional IRA. When you take withdrawals from an IRA, you pay taxes on that money. When you withdraw from a Roth, however, you do not pay taxes. This means that appreciation in a Roth is not taxed. (Another advantage: there are no MRDs for Roths.) My CYDY shares are in an IRA, so this is an important issue for me. One prerequisite for a Roth withdrawal is worth noting: the account must be active for at least 5 years before you can withdraw the money tax-free. The following quote is from Fidelity:
“A distribution from a Roth IRA is tax-free and penalty-free provided that the five-year aging requirement has been satisfied and one of the following conditions is met: age 59½, death, disability, qualified first time home purchase.”

Most of us think that CYDY share price has a bright future (to say the least). For this discussion, it does not matter if it happens in 3 months or 3 years. If you hold the shares in an IRA or a taxable account, you will ultimately pay taxes on the appreciation. No one knows what might happen tax-wise in the future, e.g., long-term capital gain rates could be eliminated, tax rates could go up, etc. Future tax changes are not an issue for a Roth unless Congress changes the rules for Roth IRAs.

I opened a Roth at Fidelity and funded it by transferring some CYDY shares from my IRA to my new Roth IRA. I will pay 2020 taxes on the value of the shares at the time they were transferred (it is an IRA withdrawal). I will not, however, pay taxes on the appreciation provided my Roth meets the five-year aging requirement. (I am already over 59½ so it would not be an early withdrawal.)

If you decide to pursue this option, I recommend you discuss with your financial adviser to make sure I did not overlook something. I assume those under 59½ could not make a transfer like this (I believe it would be an early withdrawal) but I have not investigated that. For those who are thinking about adding shares at this price, perhaps a Roth would be a good option, particularly if you are not that far from 59½.