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Author: craigflannagan Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121061  
Subject: Cost basis of inherited, but with reinvestments? Date: 8/14/2013 12:24 AM
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This I have to admit is causing me great deal of headache just thinking about it.

Obviously, I have already determined that the cost basis of original shares transferred to our brokerage account upon death of relative is based on shares valuation on DOD (July 2012). Thus I can calculate the total long term capital gains when I liquidate everything and invest into our preferred mutual funds/ETFs. (from what I read, it's long term gain for inherited shares being sold, regardless of whether or not they're really held more than 1 year or not).

Our brokerage account has reinvesting set on, and therefore we have had some new shares being purchased between February 2013, and now. I presume that any shares that I bought via reinvestments are short term gains when they are sold.

Now, this next part is causing me headaches. Am I supposed to also track and record dividends and reinvested shares between the DOD (July 2012) and when those shares were finally transferred to our brokerage account (February 2013)? Of course this information isn't shown in our brokerage statements, because our brokerage history, with those shares, began in February 2013.

Hopefully from IRS's perspective, I need to track/record dividends & reinvested shares only since the assets got transferred to our control (our brokerage account), because otherwise this means I have to beg our former Trust administrators for this data and it was like pulling a tooth dealing with the in the past :-/

But what does IRS say about this?
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Author: TMFPMarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 119000 of 121061
Subject: Re: Cost basis of inherited, but with reinvestme Date: 8/14/2013 2:04 AM
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Am I supposed to also track and record dividends and reinvested shares between the DOD (July 2012) and when those shares were finally transferred to our brokerage account (February 2013)?

Of course.

Of course this information isn't shown in our brokerage statements, because our brokerage history, with those shares, began in February 2013.

Ah, but the $$ amount should be shown on the K-1 where the income was passed through from the estate to you. You won't have it broken down by issue, but since you're liquidating everything you inherited, just lump the amount with one of them.

Phil
Rule Your Retirement Home Fool

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Author: craigflannagan Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 119001 of 121061
Subject: Re: Cost basis of inherited, but with reinvestme Date: 8/14/2013 6:40 AM
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So the missing piece to my puzzle is that I will receive a K-1. Makes sense now, thanks!

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