Inherited Mutual funds

[Earniep]

My wife inherited several mutual funds from her mother in 2022.  Last year we moved them to another investment firm.  Are they still considered as an inheritance?

[tagteam]

The manner in which your wife acquired the mutual funds would not change; she still acquired the funds by inheritance, which would typically establish your wife's basis and acquisition date in the funds (fair market value on the date of death of her mother in 2022).

However, it does not much matter since your wife has held the funds for more than one year. As a result, her holding period for the funds is long-term.

[JulieS]

Yes, the mutual funds are an inherited asset until you sell them. 

If by "moving them to a new company" you mean you she still owns the same fund, just under a different broker, that is not a sale.

Because you have moved them to a new company, you will need to track your own basis for these assets. When they are eventually sold, you need to report the date of inheritance as the date acquired, and the fair market value (FMV) as the basis (unless an alternate valuation date was established).

[Earniep]

Thank you for your reply.  For clarification, when we moved them to the new firm they moved some to new funds.  Does your answer still apply?

[VolvoGirl]

Did you get any tax forms for them?  Like a 1099B or 1099R?  Was it in some kind of retirement account like a IRA or 401k?  

[Earniep]

They are not retirement funds. Yes, a 1099B was received 

[tagteam · Accepted solution]

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@Earniep wrote:

They are not retirement funds. Yes, a 1099B was received 

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In that event, sales should have been reported on that tax reporting statement (1099-B). 

"Moving funds to new funds" is exactly the same as selling the old funds and buying the new funds and doing so would result in reportable transactions (sales of some, or all, of the funds that were moved).