I sold 100 shares of this stock on Nov. 28 this year for $25,556. I was gifted the from estate my wife’s parents use to own, which he passed away on Nov. 13 on 2020, and was worth $24,400. He purchased it for 10,000 on Aug. 23, 1998.
Report the stock sale on Sch D via form 8949. I believe you inherited the stock or it was bequeathed so not gifted. Different rules for inherited vs gifted securities. A stock gifted would use the donors adjusted basis, less gift tax paid on the transactions if any. An inherited stock uses the value of the stock on the decedents date of death value. So you will have a long term gain of 1,156 instead of 15,556 if gifted to you. This is called step up basis which is classified as long term regardless of how long you held the security.
Joni's Consulting LLC
Report the stock sale on Sch D via form 8949. I believe you inherited the stock or it was bequeathed so not gifted. Different rules for inherited vs gifted securities. A stock gifted would use the donors adjusted basis, less gift tax paid on the transactions if any. An inherited stock uses the value of the stock on the decedents date of death value. So you will have a long term gain of 1,156 instead of 15,556 if gifted to you. This is called step up basis which is classified as long term regardless of how long you held the security.
Joni's Consulting LLC
It sounds like you know the value of the stock at the time of your gift, which is good as that is your basis in the stock. You enter it in Schedule D just like any other stock sale. Turbotax should walk you through it via the Stocks, Bonds, etc item in the Wages and Income section. When you click Add More Sales, you will be asked if you got a form for the sale, click "No" and then you will be guided through the entry. Per the info in this part of Turbotax, your gain is always considered long term and you should put "inherited" as your date of acquisition.
You’ll need to prepare both Form 8949 and Schedule D to include with your return. Prepare Form 8949 before filling out Schedule D unless an exception applies.
Please see this TurboTax Help article for further guidance: Guide to Schedule D: Capital Gains and Losses
Wouldn't it be considered short-term since I inherited on Nov. 13th of 2020 and sold it on Nov. 28th?
No. According to the IRS in Publication 544 inherited property is always long-term.
Inherited property.
If you inherit property, you are considered to have held the property longer than 1 year, regardless of how long you actually held it.
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