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Author: Bob78164 Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76235  
Subject: Re: inherited stock Date: 12/4/1999 11:23 AM
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GeorgeneHD writes:

When you inherit stock from your parent, after their death, what is the percent of capital gains that you pay, if you sell it, immediately?

I reply:

As has been noted, you receive a step-up in basis, so it's likely that you will have virtually no gains, and therefore no taxes. However, if you do have gains (or losses), they are automatically taxed as long term gains (or losses), even if your parent bought the stock the day before he or she died and you sell the stock the day you receive it. I.R.C. § 1. The tax rate for long term gains is 20% (only on the gains, not on the whole proceeds of the sale), except for low-income taxpayers, for whom the rate is 10%. --Bob
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