Liquidating inherited stocks

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.

However, any income derived from those assets -- through dividends or sale of shares -- must be reported.

When the beneficiary takes possession of the stock, they can decide to hang on to it and let it keep growing in value.The basis in the shares is considered to have "stepped up" or "stepped down" to the date-of-death value.For example, if your dad bought 100 shares of Get Rich Quick in 1951 for each, his tax basis was

When the beneficiary takes possession of the stock, they can decide to hang on to it and let it keep growing in value.

The basis in the shares is considered to have "stepped up" or "stepped down" to the date-of-death value.

For example, if your dad bought 100 shares of Get Rich Quick in 1951 for $10 each, his tax basis was $1,000.

The basis price is the original price that you paid for the stock. If you inherit old stock from someone, the thought of having to go back and find out what the original price of the stock could be intimidating.

You have to know the basis price so that you can calculate the difference between what was paid for the stock and what it sold for. Finding out this information could be impossible or it could take a great deal of digging on your part.

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When the beneficiary takes possession of the stock, they can decide to hang on to it and let it keep growing in value.The basis in the shares is considered to have "stepped up" or "stepped down" to the date-of-death value.For example, if your dad bought 100 shares of Get Rich Quick in 1951 for $10 each, his tax basis was $1,000.The basis price is the original price that you paid for the stock. If you inherit old stock from someone, the thought of having to go back and find out what the original price of the stock could be intimidating.You have to know the basis price so that you can calculate the difference between what was paid for the stock and what it sold for. Finding out this information could be impossible or it could take a great deal of digging on your part.

,000.The basis price is the original price that you paid for the stock. If you inherit old stock from someone, the thought of having to go back and find out what the original price of the stock could be intimidating.You have to know the basis price so that you can calculate the difference between what was paid for the stock and what it sold for. Finding out this information could be impossible or it could take a great deal of digging on your part.