@jlr00721 wrote:
One more nuance to this question. Specifically, my mom's appreciated stocks were held in an ancient trust set up for her by her parents. Because of the terms of the trust, when I received the stocks from the trust THE BASIS could NOT BE UPDATED!! Therefore the Cap Gain is massive (e.g. P&G stock @ $ .75 acq 1956).
So, is this technically "inherited"?
What cost/acq. date do I use? The actual basis I am subject to or date of death.?
Your perspective very much appreciated!
If you have trust documents that say the basis is not allowed to be stepped up, then you would rely on that. Form 8949 only asks for "cost or other basis". That would be your 75 cents per share. The trick is to get Turbotax to put the right info on the form, because Turbotax isn't really designed for this situation. I would say the stock was inherited, use your mother's date of death, and use the "FMV on date of death" as 75 cents per share. That will put the correct value in the right place on form 8949.
It may not be technically accurate (for example, this may be a distribution from a trust, rather than an inheritance). But the final outcome will be the same.
You posted this to an old question about donating appreciated stocks to charity. In that case, the donation value is the FMV on date of donation, so the cost basis doesn't really matter.
If you are selling the stocks and keeping the money and not donating it, then almost the entire proceeds are taxable. Remember you also have to account for stock splits. P&G has had 6 2-for-1 stock splits since 1970. If the original cost was 75 cents per share, the adjusted cost basis is about 1 cent. (Yahoo Finance earliest data on P&G is from 1962, and shows a price of about $1.15 with an adjusted basis of 22 cents--adjusted for splits and dividends.) You may want professional advice to review the trust documents and determine if the trust provisions on stepped up basis really apply to you.
