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Solved

Inheriting securities

Forum|Forum|3 years ago
November 16, 2022
1 reply
13 views

If I inherit securities , how is the cost basis determined?
Do I owe any federal taxes on the security? Or do I pay the taxes ONLY when I sell the security?

For example: On 6/6/2022 I inherited 100 shares of TSLA. If TSLA was trading at $75 on 6/6/2022, do I owe taxes on $7500 if I still hold the shares? If I sell TSLA on 9/1/2022 at say $100 per share, do I owe taxes on $10,000 - 7500 or $2500 OR do I owe taxes on the full $10,000?

Best answer by R-SchuleCPA

Your tax is not owed until the year property is sold. Your cost/basis is the value on date of the decedent's death. (Condolences), which per your message is $75 per share. So if sold by the end of 2022 for $100 per share, you would report a $25 gain on sale for each share sold. If not sold until 2023, it would be reported in 2023.

R-SchuleCPAAnswer

Level 5

Your tax is not owed until the year property is sold. Your cost/basis is the value on date of the decedent's death. (Condolences), which per your message is $75 per share. So if sold by the end of 2022 for $100 per share, you would report a $25 gain on sale for each share sold. If not sold until 2023, it would be reported in 2023.

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Taxes PaulAuthor

Level 2

Thank You