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My father recently passed away and I was the beneficiary of his stock holding. Is it correct, that I will only be responsible for the capital gains tax on the earnings since the date of his death and not all he earned over the years?
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@rickyrat11 wrote:
Is it correct, that I will only be responsible for the capital gains tax on the earnings since the date of his death and not all he earned over the years?
Yes, that would be correct.
The tax code of the United States holds that when a person (the beneficiary) receives an asset from a giver (the benefactor) after the benefactor dies, the asset receives a stepped-up basis, which is its market value at the time the benefactor dies (Internal Revenue Code § 1014(a)).
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