How to Sell Inherited Stocks

1. Open a brokerage account in your name. Shares of inherited stock should be moved from the deceased’s account to your own.
2. Determine your goals.
3. Verify your cost basis.
4. Find the company’s ticker symbol.
5. Sell the stock.

Do inherited stocks get taxed?

Inherited stocks are equities obtained by heirs of an inheritance, after the original stock holder has passed. The spike in a stock’s value that occurs between the time the decedent bought the stock, until her or she dies, does not get taxed.

When to sell inherited stock for estate tax?

That valuation is used both for figuring out the cost basis for when you sell the stock and for determining its value for the purpose of estate tax. Generally, the estate chooses whether to value the deceased person’s assets immediately upon death or six months later.

What happens when you sell an inherited mutual fund?

Inherited mutual funds and stocks: There are different tax rules for inherited mutual funds or stocks that are not held inside retirement accounts. Typically, when you sell a stock or fund, you pay capital gains tax on any gain that has occurred since you bought it.

Do you get a step up in basis for inherited stock?

If the stock is sold at the estate tax value, the taxable gain for your heirs will be the NUA, because the NUA does NOT receive a step-up in basis. However, any further appreciation from the date the stock was distributed will receive a step-up in basis.�

How are inherited stocks treated by the IRS?

Tips on inherited stocks. This special treatment is known in tax talk as a “Step-up” in basis. The stepped-up value is the fair market value, as opposed to the original cost of the asset. Often, this step-up will drastically reduce the income tax your heirs will pay when they sell the estate property.