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If you inherit stock in a taxable brokerage account, you may have to pay tax, or you might not -- it depends on a few factors. Skip to main content. 24/7 Help. For premium support please call: ...
If you sell it, you would owe capital gains taxes only on $100,000: Sale price ($600,000) – Stepped-up original cost basis ($500,000) = $100,000 taxable capital gains
If you sell the stocks while they are still held within the estate, then the estate will get the deduction for the capital loss. That may or may not be the best approach.
In principle, all foreigners holding U.S. property are subject to the estate tax, even if they have never set foot in the U.S. and hold U.S. stocks directly only through a foreign brokerage account. In such cases, the estate should file Form 706-NA with the IRS within nine months of the date of death to be assured of avoiding penalties.
Whether you inherited the stocks through a brokerage, will or trust, calculating the cost-basis stays the same. However, the stepped-up rule only applies to inherited stocks (and other financial ...
Therefore, if the taxpayer's sister were to sell the house for $100,000, she would generally need to pay income tax on the $65,000 of capital-gain income. However, in the case of a beneficiary who receives an asset from a benefactor after the benefactor's death, the beneficiary's basis in the asset is "stepped up" to the FMV on the date of the ...
Understanding when to pay capital gains tax is important for both individual investors and businesses. This tax is applied to the profit, or capital gain, made from selling assets like stocks ...
Selling a stock while the gains are good is important for another reason. When most people talk about their regrets in the stock market, they wish they had bought a certain stock five years ago.