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asferruzza
New Member

Are proceeds from inherited stock exchange to cash taxable? We inherited company A stock. Company B purchased company A and exchanged A stock for cash. Is cash taxable?

Our brokerage  sent a 1099-B with this as a line item making it seem like a stock sale.  Since it was inherited stock to begin with we're not sure of tax liability.  We did not choose to have the exchange , it was part of the company takeover. Where do we  enter on 1040?

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robtm
Level 8

Are proceeds from inherited stock exchange to cash taxable? We inherited company A stock. Company B purchased company A and exchanged A stock for cash. Is cash taxable?

Generally yes it may be taxable if the amount you receive is greater than the amount of the stock on the day you inherited it. If Co. A amount was $100 on the day you inherited it and you received $150 in cash, then the $50 is taxable. However if you only received $50, then you will have a $50 loss. You would enter this in the 1099-b portion of turbotax.

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1 Reply
robtm
Level 8

Are proceeds from inherited stock exchange to cash taxable? We inherited company A stock. Company B purchased company A and exchanged A stock for cash. Is cash taxable?

Generally yes it may be taxable if the amount you receive is greater than the amount of the stock on the day you inherited it. If Co. A amount was $100 on the day you inherited it and you received $150 in cash, then the $50 is taxable. However if you only received $50, then you will have a $50 loss. You would enter this in the 1099-b portion of turbotax.

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