USA Stocks tax

[Windseaker]

Inheritance stocks 10 years ago, now they want to sell the stocks. They are waving in the amount to sell and keep but seem to want to keep only 25%.
So, stocks are worth 400k so selling 300k! But they want to switch stocks as well, buy 100k new stocks.

So this is really 100% sell of stocks because its a 25% stock move/but keep.

What is the Tax????

 

[vavillalobos1]

Hi @Windseaker

Would you be able to provide some additional context on the inheritance aspect of the situation? Did “they” inherit them 10 years ago or were the stocks recently inherited but had been previously held onto for 10 years?

Generally, unless otherwise elected, property is inherited at its “stepped up” basis or “cost.” This would usually be the fair market value upon the decedent’s passing.

Once basis has been calculated (the hardest part of this situation), capital gains are calculated as Sales Price - Cost Basis.

If the stocks were inherited, they generally are received with a long-term status. Depending on their tax bracket, long-term capital gains tax can be as much as 22% of the net gain.

Hope that helps! There can be a lot of moving pieces so be sure to consult with a professional

 

[Windseaker]

Stocks were in Trust to 5 kids for 6 years because brother tried to sue then stocks were finally divide 4 years ago. Client was told about owning at market value ATD but was unclear as to amount of stocks received.
He had a plan now that stock are down,way down is to sell now at low price, take the hit on that tax and then turn right around and buy the stocks back? He would only pay Capital gains from there forward and no inherent Tax (or is there inheritance tax?). If he is making 80K annually is that 10 or 15 % capital gain?
Elephant in the room is what are the way to lessen loses (capital gain taxes) from inheritance stocks?
Is there any roll over to real estate, IRA, etc to neglect taxs.