Skip to main content
Message Font: Serif | Sans-Serif
No. of Recommendations: 3
My father is in the final stages of life. He has a portfolio of about $2m. There are 4 children, six grandchildren. Each grandchild gets a straight bequest of $30k, the remainder is split among the four children. Almost all of the portfolio is in (highly) appreciated stock.

Three of the four children have brokerage accounts, the fourth does not, and asks [insists] that the inheritance be sent "in money" rather than stock when the time comes. I understand that inheriting "stock" will preclude taxes on appreciated gains. If I sweep the stock into the various brokerage accounts, no tax. What happens if I sell the fourth share and convert it "to money"? Will it then be taxed and will she receive less?

My condolences, Goofy. It's a difficult time.

The estate gets the same stepped-up basis as heirs do, so no income tax would be due just because the estate sold some of the stock.

That said, and assuming you're the executor, I strongly recommend that you deal with all distributions the same way--stock or cash. The easiest method would be to sell everything. Cash is much easier to split x number of ways.

Talk it over with the estate's attorney.

Rule Your Retirement Home Fool
Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.