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In terms of the inheritence the estate will pay any taxes related to the value of the stocks.

In terms of the value of the stocks they will be valued at the date of death (or an alternate date picked by the executor). Find out from the executor what that value is. When you son sells them he will pay tax on the difference between what the estate valued them and what he sold them for.

In terms of the dividends they will be taxable in the year they are paid to your son.

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