Unrealized Capital Gains
October 21st, 2006
Question: Tax consequencies when stock is inherited?
My wife will inherit her deceased father’s stock portfolio. Based on brokerage statements, there are substantial unrealized capital gains. Will my wife’s basis become the FMV of the investments as of the date of death? Any recommended web sites explaining the relevant code?
Answer: Current law applies to assets inherited from decedents dying before January 1, 2010. Until then the original basis of inherited assets is the fair market value of the assets on the date of death of the deceased, or six months thereafter if the alternative valuation date is elected by the executor. If the estate filed a Federal estate tax return this value can be taken from it. If not then the fair market value may have been reported on a state estate or inheritance tax form. Otherwise, the best available evidence of fair market value is used.
As a result of this step-up the appreciation in the value of the stock while owned by the deceased is not subject to income tax. No tax is due until the gain is realized by the heirs.
NuStar Energy L.P. Reports Fourth Quarter and Full Year 2009 Earnings and Announces Quarterly Distribution
SAN ANTONIO—-NuStar Energy L.P. today announced distributable cash flow available to limited partners of $57.0 million, or $0.99 per unit, for the fourth quarter of 2009, nearly 87 percent higher than the $28.8 million, or $0.53 per unit, for the fourth quarter of 2008.
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