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Author: irasmilo Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 123143  
Subject: Re: Inheritance or Gift?? Date: 4/16/2001 5:57 PM
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My condolences on the loss of your mother.

Since you state that your mother's estate was valued at more than 650K, the answer to your questions can be found in the records of the estate. The executor would have had to file a Form 706, Estate Tax Return, at the federal level, and probably a corresponding return at the state level. The executor should have records of how the estate assets were valued. This would include how the assets were owned at the date of death.

If the stocks were deemed to be owned entirely by your mother, then the beneficiaries would receive a fully stepped up basis and would recognize the full loss (subject to annual maximum capital loss rules).

If the stocks were co-owned, then a gift would have occurred at some time (or times) and only part of the basis would be stepped up. The remainder would be subject to Estate Tax.

If the executor made a mistake on the Estate Tax Return, you still have time to amend the return (three years from filing date).

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