If assets are put into a trust, do the beneficiaries get the "Step Up" in basis when calculating the capital gains? Is the new basis determine on the date the the settler died? Is that different with a will?
Does it matter if the trust is revokable or irrevocable? It was created as a revocable trust. My understanding is that a trust becomes irevocable on the death of the settlor. Is that correct?
The trust held dozens of individual stocks. Does the Financial Planner need to provide the price for EACH stock on the day of death?
@Kipmc7 wrote:Does it matter if the trust is revokable or irrevocable? It was created as a revocable trust. My understanding is that a trust becomes irevocable on the death of the settlor. Is that correct?
Yes, the a revocable trust typically becomes irrevocable on the death of the settlor (grantor trusts) and the assets held in the name of the trust typically receive a basis that is stepped up to fair market value as of the date of death.
@Kipmc7 wrote:Does the Financial Planner need to provide the price for EACH stock on the day of death?
Yes. The fair market value of each individual stock must be calculated as of the date of death, which is typically done by taking the high price and low price for the day and dividing by two.
@Kipmc7 wrote:Does it matter if the trust is revokable or irrevocable? It was created as a revocable trust. My understanding is that a trust becomes irevocable on the death of the settlor. Is that correct?
Yes, the a revocable trust typically becomes irrevocable on the death of the settlor (grantor trusts) and the assets held in the name of the trust typically receive a basis that is stepped up to fair market value as of the date of death.
@Kipmc7 wrote:Does the Financial Planner need to provide the price for EACH stock on the day of death?
Yes. The fair market value of each individual stock must be calculated as of the date of death, which is typically done by taking the high price and low price for the day and dividing by two.
You answered only part of the question about the step in in value.
Do both a revocable and irrevocable trust get the step up in value and does it matter that a revocable trust becomes an irrevocable trust on the death of the settlor?