Dad held AT&T shares for a numbert of years. Some time ago he placed my name on the certificate as co-owner (wros). He has passed on and I am now the owner as survivor. What is my cost basis/date for these shares-his original cost basis/date? or the avg. trade value on the date of his passing? Thanks.
Your cost basis in his shares is his cost basis. If you were named as beneficary instead of a co-owner you would have been eligible for a stepped up basis at time of death (the value of his shares at his death). A good lesson on how to hold title - don't add future heirs to the title or vesting as they do not get the advantage of a stepped up basis.
Another factor that you might consider is whether there are any gift taxes due. Depending upon the value of the stocks at the time that he placed your name on the certificates, he should have paid a gift tax. If the gift is greater than $10,000 there is a tax due on this transfer of property. You should contact a tax accountant concerning your situation.glenn
No need to panic until you know what your state's law says about joint ownership of securities.The answer depends on state law. If Dad adds son's name to a brokerage account or stock certificate as a joint tenant with right of survivorship and if state law says that one of two joint tenants with right of survivorship have the right unilaterally to partition the stockholding 50/50 (e.g., force the custodian to split the account 50/50 between Dad and son, with son being able to do whatever he wants with his 50%), even though that joint tenant contributed less than 50% of the purchase price (e.g., zero), then, yes, a gift was made from Dad to son equal to 50% of the value at the time the gift was made and son's basis in that 50% is the market value on the date of the gift. The other 50% would be stepped up at the time of Dad's death.If state law says that one of two joint tenants with right of survivorship does not have the right to unilaterally partition the holding except to get back what he or she contributed, then there would be no gift if Dad contributed 100% of the purchase price for the stock, 100% would be included in Dad's estate and there would be a 100% basis step-up to the date of death value upon Dad's death.DISCLAIMER Nothing in this message is to be considered as the rendering of legal advice for specific cases. Readers are responsible for obtaining such advice from their own legal counsel. Messages posted on this discussion board are intended to provide information for educational and informational purposes only.
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