Liquidating inherited stocks receiving cash

Tax laws make it relatively easy to determine your tax basis on inherited stock or mutual fund shares.Put simply, the tax basis is the price of the shares on the valuation date.Inherited stocks are not considered income, so you need not report them on your income tax return.

It's impossible to guess what tax rate might be imposed on estates after 2012.

The value of inherited stocks is determined by the date of death.

Generally, the price is the market closing price on that date.

All the deceased's estate planning documents and other important papers must be located before a personal representative or an executor can be appointed by the probate court, or before a successor trustee can take over the administration of a trust.

Important papers could include bank and brokerage statements, stock and bond certificates, life insurance policies, car and boat titles, and deeds.

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