Inheritance and Capital Gains - Revisited

Discussion in 'Tax' started by Harry, Jan 16, 2005.

  1. Harry

    Harry Guest

    Hi, everyone.

    Thank you very much for your prior insight to my first go
    'round with this topic. Now that I've had some time to get
    my head around this a little better, I am hoping you will
    indulge me on the same subject. I have been digging through
    all of the old paperwork and can paint you a more complete
    picture.

    - 5/97, my mother died and her estate was moved under an
    irrevocable trust for the next 7 years. Included in that
    was an IRA account.

    - 8/97, the IRA was transferred to a different brokerage
    house that the trustee worked with on a regular basis.

    - 11/98, the trust opted to take the distribution of the IRA
    rather than defer for 5 years and the proceeds were dumped
    into a regular brokerage account.

    - 5/04, the trust began to be dissolved but the brokerage
    account still needed to be transferred into my name.

    - 11/04, the brokerage account was transferred into my name
    and the trust dissolved.

    - 12/04, the securities were sold and the proceeds
    reinvested in mutual funds in my brokerage account. (No, I
    wasn't watching the calendar...)

    None of the securities held in the brokerage account by the
    time of the dissolution of the trust were the same
    securities my mother had owned. So,

    1.) Should I be using the cost basis on the date of
    purchase by the trust to determine my capital gains/losses
    or the values on the date the securities were transferred to
    me? (Considering some of these are companies such as Cisco
    and AOL, I'd much prefer the older, pre-Bubble Burst
    prices.)

    2.) Who is responsible for any capital gains on dividends
    before the account was transferred to me? Would that be me
    or the trust?

    Thanks for your patience and your insight.
     
    Harry, Jan 16, 2005
    #1
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