I have a large stock position with unrealized gains. Can I use the appreciated stock to fund my HSA?

I like the way you think!

Sadly, the IRS is very clear about this; contributions must be cash.

As IRS Publication 969 IRS Publication 969 states, “Contributions to an HSA must be made in cash. Contributions of stock or property aren’t allowed.”

Even though you may have to realize capital gains to make the contribution, we recommend that you fund your Health Savings Account (HSA) to the maximum limit each year and that you keep funding it to the maximum as long as you can no matter how much money you have in the account.

Funding your HSA to the maximum has many advantages and few disadvantages. The primary reason to have HSA compatible health insurance is specifically to be able to fund your HSA to the maximum. You will likely use your entire HSA balance in your lifetime. It can help provide a tax efficient way to self-insure for long-term care. And it can function like an IRA with no required minimum distributions.

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