inherited stock ?

[ljwalters]

when father dies mother puts son on stock account,  Mother dies,  Is there any step up in basis????

[RitaB]

When dad died, mom gets his half at FMV on DOD. Now she owns it all. She gifts half to son, and the gift basis depends upon whether he sells at a loss or gain. When mom died, son gets her half at FMV on DOD.

http://www.irs.gov/publications/p551/ar02.html#en_US_201412_publink1000257012

[OldJack]

Sure a step-up for someone depending upon the facts.  Not enough details in the post.  The fact that mother put son's name on the account may not be a gift depending upon the time and other details.  Its the details stupid!  Tell us the details.

[Abby Normal]

Was son on account as TOD or as joint owner?

[Max W]

When dad died, mom gets his half at FMV on DOD. Now she owns it all. She gifts half to son, and the gift basis depends upon whether he sells at a loss or gain. When mom died, son gets her half at FMV on DOD.

http://www.irs.gov/publications/p551/ar02.html#en_US_201412_publink1000257012

In community property states, surviving spouse could get full stepped up basis. It depends on the state and how the account is titled.

[OldJack]

Don't you just love posters that ask questions and then never respond to any answers.

[ljwalters]

Sorry late to respond.  Mom fell split her head open 8 stitches, She just turned 89.  And this year was going so well.

 

All I know.   Father and mother were on account jointly for many years,  He dies April of 2008.

Account was left alone both names and son told her to get dads name off.

So in 2010 she took dads name off and added son (by the way is a jr.)

Mom was in her 80s when she fell over her recliner and was suspended upside down for several days before son got ahold of a neighbor to check on her.  She died of complications a few months later. In 2012.

 

I just found out today that there was a trust but no trust return done.  He thought her accountant had done it.  What was he thinking no pay no trust return..

 

There were two accounts (portfolios) one still just in her name.  (Still in her name with lottttts  of Dividends).

 

When son's broker discovered he had 2 different holding he convinced son to move all the holdings from one broker.

When they did this everything in the joint account was sold (about 350,000 worth).  most had pretty small basis, about 48,000 had no basis listed at all,  Broker said it was to old to find record.  That is why I am asking about how much I can step up basis. At this point he owes about 30K to Fed and another 8K to state.

 

He called to day to tell me he was able to get a history (he said about 30pages worth) of one of the portfolio.

 

Now the fun begins. 

 

1. Step up basis on all owned before 2008 to dads date of death values.

2. Step up basis again by 50% on date mom dies by.

 

Have I got this right.

Oh ya I will need the sight for historic basis.

 

Thank you LInda

[ljwalters]

A little more info.

 

Ca Community property state.  I am sure mom get total step up in basis from dad.

My client (son) name was on the account but moms SS# for reporting purposes.

Never included on Clients return always on Moms.

 

Moms Final 1040 Was filed by her accountant in Los Angeles.  But she never did the Trust return.

Maybe  that was because I fund out the BROKER or financial advisor has had the trust all this time.

 

Where do these people come from.

[kcjenkins]

Yes, in CA mom gets 100% step up as of dad's DOD.  So that simplifies things a lot.  2008 basis should be simple enough.  If son's name was just added as a convenience, not a gift, as it sounds, that should not be a factor.  Is son the sole heir?  

[RitaB]

Where do these people come from.

Crying.

[RitaB]

Yes, in CA mom gets 100% step up as of dad's DOD.

Is that just for the CA return? Not the federal, right?

[ljwalters]

100% step up from dad should be for both federal and state.

[ljwalters]

No son does not get it all.  Mom made it quite clear his brother gets  half.  And he has done that. 

So yes I would say it was for convenience on moms part.

[RitaB]

100% step up from dad should be for both federal and state.

KC said Mom gets 100% step up in CA. I think Mom gets 50% step up for federal. Which is, as you say, 100% of Dad's half.

[BulldogTom]

KC said Mom gets 100% step up in CA. I think Mom gets 50% step up for federal. Which is, as you say, 100% of Dad's half.

Rita, in a community property state, if the ownership is joint, you end up with a full 100% Federal and State step up in basis on the first to die.  If the stock was worth 100k and the basis was 10K, the surviving spouse steps up to 100K of basis.

 

Tom

Newark, CA

[RitaB]

Rita, in a community property state, if the ownership is joint, you end up with a full 100% Federal and State step up in basis on the first to die.  If the stock was worth 100k and the basis was 10K, the surviving spouse steps up to 100K of basis.

 

Tom

Newark, CA

Well, hmmm, obviously I didn't know that. Wow. Thank you very much. I'm a little amazed. Not the first time, probably won't be the last...

[OldJack]

There are nine community property states in the U.S.

• • Arizona,

  • California,

  • Idaho,

  • Louisiana,

  • Nevada,

  • New Mexico,

  • Texas,

  • Washington, or

  • Wisconsin.

Edited March 25, 2015 by OldJack

[ljwalters]

Actual stock history is on the way.

 

Tell me if I have this right. easy numbers

 

Original basis 10

2008 basis 100

2013 basis 150

 

new basis 125.

 

Or because it was for convenience  new basis 150

Amount given to brother would definitely be the 150

 

What do you think.

 

Suffering with stones so I won't be back until tomorrow.

[DANRVAN]

Well, hmmm, obviously I didn't know that. Wow. Thank you very much. I'm a little amazed. Not the first time, probably won't be the last...

I am not in a community property state either, but I believe the full step up must be allowed because all the joint property is included in the decedent's estate. (?)