The Motley Fool Discussion Boards

Previous Page

Financial Planning / Tax Strategies


Subject:  Re: Estate Funds Date:  12/30/2013  9:26 PM
Author:  TMFPMarti Number:  119777 of 127513

I purchase $1000 of BRK.B stock in a R/O IRA
I purchase $1000 of BRK.B in a regular margin brokerage account.

In 25 years I die and each account is worth $25000 dollars.

When these accounts are left equally to my 2 children, what will be the basis of the proceeds when they eventually cash the stock in...

I assume R/O means rollover?

The basis in the shares in your regular account is their FMV on the date of your death.

The basis of any item in any kind of IRA is irrelevant. (After-tax contributions to a traditional IRA are sometimes called basis in the IRA.) Assuming there's no after-tax money involved in your traditional IRAs, everything that comes out of the IRA will be taxed as ordinary income. Qualified distributions from a Roth IRA are tax-free to your heirs.

Basis: Pub 551
IRAs: Pub 590

Rule Your Retirement Home Fool
Copyright 1996-2018 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us