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?

[asferruzza]

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?

[robtm · Accepted solution]

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.