2006-12-16 05:25:54 · 8 answers · asked by alexsyaya 1 in Business & Finance ➔ Taxes ➔ United States
Well, you'll always have to pay "some" tax, but good news is you'll be taxed at the long term capital gains tax rate, 15% rather than the short term rate which I believe is now 25%. You might want to wait until after the first of the year. If you're over 45, check the new rules for large transfers into 401K accounts, you might be able to put it all in there, then sell and re-invest.
2006-12-16 05:35:23 · answer #1 · answered by Tony S 2 · 0⤊ 0⤋
I'd say possibly... Generally the step-up basis tends to be favorable for you (that is, your basis in the stock is the value on the day you inherited it), however, if you inherited it when the decedent was carrying a loss on it, I think that there are some very esoteric provisions in the IRS code that might let you escape ANY tax. It largely depends on how good the record keeping has been and how much trouble you want to go to. The TOP TAX on your long term gains is 15%. Depending on what tax bracket you fall into you may pay much less.
2006-12-16 14:35:14 · answer #2 · answered by answerING 6 · 0⤊ 0⤋
You'll have to pay capital gains tax on any appreciation, if any, since the date of death of the person you inherited the stock from. Any gain during the time the other person held it is not taxable to you. Your "basis" in the stock is its value at the time of death of the previous owner, without regard to what they originally paid for it. Most of the time, this is in your favor, but can work against you depending on timing.
2006-12-16 16:31:37 · answer #3 · answered by Judy 7 · 0⤊ 0⤋
Capital gains are the sale price minus your basis. For inherited stock, your basis is usually the stock price on the date of death. If the price has not increased, you have no gain to tax. If it has, you are usually subject to tax. Depending on what stock you inherited, either could be the case.
2006-12-16 18:18:51 · answer #4 · answered by STEVEN F 7 · 0⤊ 0⤋
No, you will have to pay capital gains tax on the difference between what you sell it for and the basis (value) when you inherited it.
2006-12-16 17:34:00 · answer #5 · answered by strawberrycrush 4 · 0⤊ 0⤋
No, but the maximum federal capital gains tax is 15% of the difference between the price on date of death of the testator and the date of sale.
State income tax, if any, is extra. If it's a huge amount of gain, then move to a state (like Florida) without an income tax. Then sell.
2006-12-16 13:34:19 · answer #6 · answered by Anonymous · 5⤊ 0⤋
No you must pay the tax.
2006-12-16 13:31:28 · answer #7 · answered by ? 6 · 0⤊ 0⤋
Pay Caesar what is owed.
2006-12-16 14:22:55 · answer #8 · answered by Anonymous · 0⤊ 1⤋