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?
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.
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.