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Level 3
posted Aug 3, 2024 6:23:31 AM

When is basis for shares of ETF purchased by testamentary trust after DOD, but not distributed to heirs until later?

The decedent's estate was placed into a trust.  The trust purchased shares of mutual funds and ETFs a year after the DOD.  Shares were distributed to the heirs months later.  Is my "date of purchase" and cost basis determined by the date that I acquired the shares, or the date that the shares were purchased by the trust?

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1 Best answer
Level 15
Aug 3, 2024 6:38:07 AM

The date the shares were purchased would be the date that would be used for the basis of the shares.

 

If the shares were later distributed to the beneficiaries, then the beneficiaries would take those shares with the trust's basis (i.e., a carryover basis).

 

The shares would not be considered as "acquired from a decedent" (subject to a stepped up (or down) basis) if they were acquired after the death of the decedent.

2 Replies
Level 15
Aug 3, 2024 6:38:07 AM

The date the shares were purchased would be the date that would be used for the basis of the shares.

 

If the shares were later distributed to the beneficiaries, then the beneficiaries would take those shares with the trust's basis (i.e., a carryover basis).

 

The shares would not be considered as "acquired from a decedent" (subject to a stepped up (or down) basis) if they were acquired after the death of the decedent.

Level 3
Aug 3, 2024 7:52:01 AM

Thank you for the clear and prompt answer!