Hi,
My father recently passed away, and my mother was the sole beneficiary. Much of their assets were held as stocks jointly. Most had very low cost basis. My mother wishes to pass down an appreciable fraction of the estate to myself and my two siblings. We live in Pennsylvania, a non-community property state.
My understanding is that on the assets held in common there will be a 1/2 step-up in basis - that is 1/2 of the shares of each stock held jointly will be stepped up in basis to their value at the date of my father's passing. My questions are:
1) If she disclaims a portion of the stock held jointly, does that mean that 1/2 of the shares will be passed to myself and siblings at the stepped-up cost basis, or will we receive shares at the average cost basis?
2) If my mother instead she elects to make a gift, can she gift or make a specific lot sale on the stepped-up shares, or is she obligated to use an average cost basis method to determine the cost basis?
We have an attorney advising us (chosen by sister who is the executrix), who insists that in all circumstances only the average cost basis method can be used in both scenarios above. I am skeptical of this since it doesn't make any sense and I can find no requirement anywhere that this is the case, either in IRS publications or elsewhere.
Thanks in advance!
My father recently passed away, and my mother was the sole beneficiary. Much of their assets were held as stocks jointly. Most had very low cost basis. My mother wishes to pass down an appreciable fraction of the estate to myself and my two siblings. We live in Pennsylvania, a non-community property state.
My understanding is that on the assets held in common there will be a 1/2 step-up in basis - that is 1/2 of the shares of each stock held jointly will be stepped up in basis to their value at the date of my father's passing. My questions are:
1) If she disclaims a portion of the stock held jointly, does that mean that 1/2 of the shares will be passed to myself and siblings at the stepped-up cost basis, or will we receive shares at the average cost basis?
2) If my mother instead she elects to make a gift, can she gift or make a specific lot sale on the stepped-up shares, or is she obligated to use an average cost basis method to determine the cost basis?
We have an attorney advising us (chosen by sister who is the executrix), who insists that in all circumstances only the average cost basis method can be used in both scenarios above. I am skeptical of this since it doesn't make any sense and I can find no requirement anywhere that this is the case, either in IRS publications or elsewhere.
Thanks in advance!
Statistics: Posted by Harvey123 — Thu Jul 25, 2024 3:51 pm — Replies 5 — Views 477