I received stocks from an irrevocable trust. If I sell the stocks now I have been advised that they would not have a stepped up stock basis. If I never sell the stocks received from the trust, then will the stocks that are now in my revocable trust to my children, when I pass and my children inherit the stocks, will they be taxed on a stepped up basis? The stock was transferred from the trust to my brokerage account.
@Mountain_Business1 wrote:
If I never sell the stocks received from the trust, then will the stocks that are now in my revocable trust to my children, when I pass and my children inherit the stocks, will they be taxed on a stepped up basis?
Yes, if the stocks were distributed to you in-kind from the trust (i.e., you received the shares), then the shares will receive a stepped-up basis (per Section 1014) provided they are included in your estate when you pass.
@Mountain_Business1 wrote:
If I never sell the stocks received from the trust, then will the stocks that are now in my revocable trust to my children, when I pass and my children inherit the stocks, will they be taxed on a stepped up basis?
Yes, if the stocks were distributed to you in-kind from the trust (i.e., you received the shares), then the shares will receive a stepped-up basis (per Section 1014) provided they are included in your estate when you pass.