## What is the tax basis for inherited stock?

Inherited stock, unlike gifted securities, is not valued at its original cost basis—a term used by tax accountants to describe the original value of an asset. When an individual inherits a stock, its cost basis is stepped up to the value of the security, at the date of the inheritance.

## How do I find the cost basis of a stock on death date?

Tax Basis of Inherited Stock Instead, to calculate the value of the stock on the date of death, take the average of the highest selling price and the lowest selling price of the stock on that date. For example, say you inherited shares of a company from someone who died on June 1.

What is the cost basis of inherited securities?

The cost basis for inherited stock is usually based on its value on the date of the original owner’s death, whether it has gained or lost value since he or she purchased it. If the stock is worth more than the purchase price, the value is stepped up to the value at death.

### What if I don’t know the cost basis of my stock?

You can Go online for historical stock prices For example, the historical section at Marketwatch or Nasdaq. It’s generally acceptable to take the lowest and highest price from a given day and average them to arrive at a cost basis.

### What is a date of death valuation?

The Date of Death Appraisal, also called a “date of death valuation,” is a real estate appraisal and a key component of the accounting of the worth of the estate required by the federal government. The Internal Revenue Service (IRS) lays out a list of requirements pertaining to deceased persons and their estates.

How do I calculate the basis of inherited stock?

Multiply the basis date share price times the basis date number of shares to calculate the cost basis of your inherited shares. If the stock has split, it is easily determined by viewing the historical stock prices on sites such as Google Finance and Yahoo Finance.

## What are the taxes on selling inherited stocks?

Gains from the sale of common stock you have inherited are always long-term and are taxed at a maximum rate of 15 percent. The cost basis is calculated differently. Gains or losses that occurred prior to the date of death are disregarded.

## Does stock have to be sold when inherited?

The estate of the deceased person takes care of any tax issues, and once you have received stock as part of an inheritance, the stock is yours without any taxes due. However, you can become liable for taxes if you sell your inherited shares.

How to sell inherited stock?

How to Sell Inherited Stocks | Budgeting Money – The Nest. Step 1. Open a brokerage account in your name. Shares of inherited stock should be moved from the deceased’s account to your own. This will require Step 2. Step 3. Step 4. Step 5.

What is the tax basis for inherited stock? Inherited stock, unlike gifted securities, is not valued at its original cost basis—a term used by tax accountants to describe the original value of an asset. When an individual inherits a stock, its cost basis is stepped up to the value of the security, at the date…