UnThreaded | Threaded | Whole Thread (5) | Ignore Thread Prev Thread | Next Thread
Author: StTick101 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 265904  
Subject: Inherited Stock Date: 10/12/2012 2:02 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
I inherited some PRU stock this year. It's down about $9.00 a share from when I received it. I'm thinking about selling it to buy something else.
My question is "What will my tax liability be if I choose to sell?"
Will it be for what I inherited it for?... or the sell price?
Print the post Back To Top
Author: HarryG Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 259476 of 265904
Subject: Re: Inherited Stock Date: 10/12/2012 2:31 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
Hi -

I'm no tax expert, but my recollection is that you list the basis as the value at the time of inheritance, and the net gain/loss based on the sell price at the time of the sale. Also, if you inherited it more than a year ago, it's a long term gain/loss. If under a year, it's a short term gain/loss. Probably not quite so important for a loss than a gain:-(

Net of all this is that I THINK \you would end up booking a net $9.00 per share loss (more or less).

However, I'd feel better about this advice if some other Fool would chime in and support my statement:-)

Later,

HarryG

Print the post Back To Top
Author: CABob Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 259478 of 265904
Subject: Re: Inherited Stock Date: 10/12/2012 4:31 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
Your cost basis is the value of the stock on the date of death or in some cases some date after the death. If you sell you will have a capital gain (or loss) on the difference between the selling price and your cost basis.
Additional questions about taxes might be put on the Tax Strategies message board.

Bob

Print the post Back To Top
Author: pauleckler Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 259479 of 265904
Subject: Re: Inherited Stock Date: 10/12/2012 4:41 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Note that when you sell the stock, the loss can be used to reduce your income taxes in two ways. First, it reduces your other capital gains profits for the same tax year, or if the difference is a net loss, up to $3K per year can be deducted from your other income.

If your net loss exceeds $3K, the remainder can be carried over to future tax years and written off against future gains or current income at the rate of $3K per year until depleted.

The worst of this is the paperwork to make sure you claim the capital loss carry over.

And note in some circumstances, if capital gains rates go up next year as some expect, the loss could be worth more next year in some situations.

Print the post Back To Top
Author: PeterLincoln Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 259651 of 265904
Subject: Re: Inherited Stock Date: 11/16/2012 9:22 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Hi,

I happen not to own PRU but assuming that it is Prudential, you should know that it's currently undervalued and has a very nice dividend yield.
Morningstar 4 stars and see this in their analysis...

"To keep up with competition, life insurance companies are forced to roll out similarly priced products that match their competitors, leading to a cycle that pushes down industry returns. As a result, it is extremely difficult for Prudential or any life insurer to generate sustainable excess returns in the long run, in our view. "

Cheerio,

p

Print the post Back To Top
UnThreaded | Threaded | Whole Thread (5) | Ignore Thread Prev Thread | Next Thread
Advertisement