OT- Inheritance advice

[jdbulldog]

Consult with a reputable CPA. Do not trust people who have been doing taxes a long time and live just down the road! It has to be a reputable CPA.

 

[MaxwellSmart]

I don't know about stock inheritance, but I'm dealing with my mom's estate from when she died in February. She had a will and I was basically the sole beneficiary. She did have my two kids listed getting a couple of small things. Pisses me off that despite this it still has to go through 17ing probate. What is the purpose of having a will if I still have to spend months on a judge to stamp off on it? Not like we're talking a massive estate here. Just her little house and car. Not even any life insurance money.

I'm in TN but when a relative died recently, the will went to probate but only the money was held. The land and house transfered immediately to the designated party.

 

[o_Brokerdawg]

The 10 year non spousal rule is a game changer. In the past year 2 of my high net worth clients inherited large IRA's. Because both are in their mid 50's they are in what they believe to be the prime of their careers financially. After review both chose to only take out their RMD and their plan is to ask their employers to not pay them in year 10 to avoid as much taxation as possible. As someone mentioned earlier this can change yearly depending on the BBB and other things. Remember that the income or withdrawals you take from the inherited IRA will be taxable on top of your yearly income.

If you are over $750K in income you might also consider simply taking the hit and being done with it.

Assuming my parents pass before me I will take out as much as possible without going into a higher tax bracket each year. I pray that's a long time from now.

Lastly, those of you with parents with IRA's you are aware of. A typical Mississippian has $50-$250K in their IRA at death. If you have financial control over their finances cash out their IRA before they pass and the distribution will be taxed at their income levels (assuming they are retired and living on SS) will be taxed at their income levels.

Lastly, each and every situation is different. Consult your CPA and a competent FA if you don't understand what I'm speaking of above.

 

[Scottfield1]

This boggled my mind when I was reading about it last week, but on a standard brokerage account, am I understanding correctly that the cost basis resets to current value when she inherits it?

The basis is stepped up on the date of death of the owner. Not when your wife takes ownership of the holdings.