The Motley Fool Discussion Boards

Previous Page

Financial Planning / Tax Strategies

URL:  http://boards.fool.com/holding-period-question-12349354.aspx

Subject:  Holding Period Question Date:  4/5/2000  10:07 PM
Author:  AEP Number:  33606 of 121316

I would appreciate learned Foolish opinions for - What is the appropriate Holding Period in the following case:

My mother (now deceased, DOD=7/98) was the primary owner and SS# of record for a Joint Tenant stock account, there was only the two of our names on the acct. I am a only child, my father had died many years ago, no stepfather. Also, I am the sole beneficiary of her estate. I didn't contribute to the purchase of the stock or have any share in the annual returns from it while Mom was alive, and had been listed as a joint tenant on the stock acct for many years. In Feb. 1999 (approx 8-months after Mom died) the stock was converted to that of another company because of a merger and the resulting fractional share of stock was distributed (not my choice). The proceeds of this fractional share were reported on a F-1099B. I treated this as a Sale transaction with a minor capital gain on my 1999 Income Tax return. I used the FMV of the stock back in July '98 as the basis, and adjusted it for the conversion, there weren't any reinvestments. Holding Period became the issue on Schedule D.

The question is "Holding Period", which I assume depends on how I technically acquired the asset. In the eyes of the IRS, did I get the stock-acct. because I was the sole-surviving joint tenant, or because I inherited it?

I understand that if I hadn't been listed as the joint tenant on the acct, I simply would have inherited it and the IRS Pubs are fairly straight forward with basis and Holding Period. In this case, the holding period would be "Long Term" regardless of how long I had actually held the stock-acct.

Research done: I have read various IRS Pubs, 551, 544, 550, 559, and 525 and haven't found a discussion of holding period pertaining to my specific case - where I didn't have finanical input or interest in the stock acct as a joint tenant before Mom passed on.

My current opinion, based on the lack of info to the contrary in the Publications is that I should assume a "Long Term" holding period.

Thanks in advance for your help.

AEP
Copyright 1996-2014 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us