topic 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? in Investors & landlords

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 — Tue, 04 Jun 2019 21:06:32 GMT

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?

Generally yes it may be taxable if the amount you receive...

robtm — Tue, 04 Jun 2019 21:06:34 GMT

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.