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Tax Guru-Ker$tetter Letter
Thursday, March 09, 2006
 
Inherited Mutual Funds

Q:

Subject: basis of inherited mutual fund shares
 
Good Morning Kerry,

I am at a loss to find a good source that tells me if the inherited half of a jointly held mutual fund stock account gets a stepped up basis in a non-community property state. I have found that the entire fund would be stepped up in a Community property state, and perhaps the obvious is to assume half does in a non-community property state, but my tax research library still includes a 1969 court case that says it does not. What is your take on this?

Thanks

A:

 In a non-community property state, only the portion of jointly owned asset that was inherited is given a new stepped up costs basis.  The cost basis of the portion that you already owned will remain the same until you sell it or you pass away.

This has long been the rule.  Any competent professional tax advisor should be able to work with you on this.

Good luck.

Kerry Kerstetter

 


- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 3/09/2006 12:22:00 PM Send this post:

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