"Paul Thomas, CPA" <paulthomascpapc[at]bellsouth.net> wrote
- quote -

I meant it is not clear whether the stocks of which the OP
wrote are in an IRA. If they are in an IRA, then what you
and others wrote (on IRAs) is of course correct.

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"Elle" <honda.lioness[at]spamnocox.net> wrote
- quote -




<<<shaking my head> > >


The IRA issue is MOOT. It's income when it gets distributed - unless there
was some basis (meaning after-tax or non deductible contributions made in
prior years) in the IRA.

There's no point in even looking at the IRA investments and dreaming that
you get to step-up the basis.




--
Paul A. Thomas, CPA
Athens, Georgia

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"sandy" <fossilnut[at]isp.com> wrote
- quote -

Assuming you do need to compute the basis (see other
posters' comments, e.g. are all stocks in an IRA?), then the
IRS says to use the "fair market value," where FMV is "the
price at which property would change hands between a buyer
and a seller, neither having to buy or sell, and both having
reasonable knowledge of all necessary facts" (Pub. 551). The
average of the high and low prices for the date of death is
considered a reasonable estimate of FMV in your situation
(and others) and is customary. Note that there is often
little difference between using either the high or the low,
so often there is nothing to be anxious about; nothing to
cause worry were one to be audited.

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sandy wrote:
- quote -

valuing your husband's estate, then you get a 100% step up in
value. I have always used the average of the high and low prices
on the date of death.

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"sandy" <fossilnut[at]isp.com> wrote

- quote -




To continue......the IRA does not receive a "step-up" in basis. Each
distribution will be income to you unless there was some after-tax
contributions to the IRA.





--
Paul A. Thomas, CPA
Athens, Georgia

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sandy <fossilnut[at]isp.com> wrote:

- quote -

This will depend on how Washington defines community property.
Normally community property gets its basis increased to the date of
death value when one spouse dies.

The issue will be, apparently, whether jointly held property (as
opposed to specifically community property) is still considered
community. If not, the basis will be stepped up with respect only to
half of the value of the property.

Stu

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

I'm trying to understand what my tax basis is now. My husband
recently passed away and we held securities (stocks and mutual funds)
jointly (he also had an IRA which has been moved into my IRA). I live
in Washington state (which I believe is a community property state).

I think I've found that the total Joint account's tax basis will be
stepped up to his date of death??? Using "Historical" stock value web
sites, I've found this information on our holdings but I'm not sure
which figure I should use.....the closing price, the high or low, or a
average figure?

Also.....Does the IRA's basis change also or how do I figure that (or
do I even have to...will the brokerage company do all that for me?)

Thanks! This is all new to me and I hope I asked my questions so you
can understand what I'm asking!

Sandy

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >