- quote -

Doesn't matter, that is what the law says.

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Seth Breidbart wrote:

- quote -

Because that's the law;-) See p. 110 of Publication 17.

Note that this only applies if you receive the actual
or brokerage securities. It does not apply if the
estate executor (or probate court) liquidated the
securities you were given in a will and gave you
the proceeds. - RM

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sethb[at]panix.com (Seth Breidbart) writes:

- quote -

Because the IRC (and hence Congress) said so.

- quote -

Still long-term.

See IRS Pub 550.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

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- quote -

IRC Sec. 1223 makes it so.

--
Alan
http://taxtopics.net

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"Seth Breidbart" <sethb[at]panix.com> wrote:

- quote -

Why? How about BECAUSE THE LAW SAYS SO???

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

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- quote -

Why? What if the total ownership time is short term?

Seth

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Thanks for the responses. I appreciate it.

"Herb Smith" <smithff33[at]aol.com> wrote:
- quote -


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"Harry" <HikinHarry![at]hotmail.com> wrote:

- quote -

Try IRS publication 551, "Basis of assets" and 559 "tax
guide for survivors" at
http://www.irs.ustreas.gov/formspubs/index.html

You compute a capital gain by subtracting the "adjusted
basis" (AB) of an asset and the expenses of sale from the
selling price. An asset received when a trust dissolves
usually has the same AB as it had while in the trust (there
is an exception if the trustee elected to recognize gain on
the transfer -- ask the trustee.)

For securities purchased by the trust, AB is cost (adjusted
for any splits, spinoffs, etc.) If mom transfered securities
to an existing, irrevocable trust for you as gifts while she
was alive, the AB is her original cost.

Most likely from your question, the trust was either a
"living trust" that she controlled while alive, or it was
created and funded at her death. In this last case, the AB
of securities = fair market value at the date of her death
(as adjusted for subsequent splits, spinoffs, etc.) That's
the "magic date" for measuring the gains and losses on which
you would owe tax, and any such gain or loss will be treated
as long term.

Bob Daniels http://taxprofessor.blogspot.com

("And remember, you can't rely on free advice." - 'G)

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Harry wrote:

- quote -

When the securities were transferred to the testamentary
trust their "cost basis" was adjusted to the FMV on date of
death. I don't know how long ago your mother died, but that
is also your cost basis for capital gain calculations.

- quote -

Inherited securities are always "long term". Your "magic
date" for cost basis is the date of the decedent's death, so
it they did well in the interim (in the trust), you may have
a larger capital gains bill than you are expecting.

- quote -

Try Pub 550 at http://www.irs.gov

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My mother had left her investment portfolio in a trust for
me after she had died and the term of the trust ended this
past Spring on, say, 5/1. Through delays and foot-dragging
by the broker, I finally got the investment account
transfered into my name and then transfered to a different
broker (hence, the foot-dragging). Let's say that took
place on 12/1. On 12/23, the securities were sold for
different mutual funds and there was an increase in value
since 12/1. So, here are my questions:

1.) Am I responsible for the capital gains since just 12/1
when the account was transfered to me or would I owe back to
5/1?

2.) Assuming that 12/1 is the magic date, would I owe
long-term capital gains or short-term? Since the securities
were bought years ago and they were transfered vs. sold to
me, I would think that I would get hit for long-term capital
gains.

Any thoughts? Also, if there is somewhere I could read up
on this, please let me know. It's been kind of tough to
track down.

Thanks in advance.

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