What is the base price for a legacy brokerage account?
Q. My father passed away, after a very long life, this summer and I will receive a third of his estate. I’m not sure if any accounts have been moved from her personal social security number to the estate’s EIN. When the assets of his taxable brokerage accounts are distributed, at what point should I consider the basis for moving forward according to the rules of increase: at the time of his death or at the time of the distribution to my property, the distribution to the estate or at some other time?
A. We are sorry to hear about your father.
The timing will depend on several things. Here is how it works.
When a person dies, someone must be tasked with closing the estate, said Bernie Kiely, chartered financial planner and certified public accountant at Kiely Capital Management in Morristown.
This person is usually the executor who was named by the deceased in the will, he said. If there is no will, then someone, usually a relative, must apply to the court to become the administrator of the estate.
âThe executor or administrator is the person who manages the assets and liabilities of the estate,â Kiely said. âThey should be able to answer any questions you may have about the estate. “
You asked a specific question about increasing the base.
When you inherit someone’s property, you receive a base increase. The basis is tax language for your expenses, Kiely said.
The inherited assets have a basis equal to the market value on the date of death, he said.
âTechnically, the new basis for a securities account is the average of the high and low price of the security on the date of death,â he said. âIf the executor or administrator of the estate requests it from the brokerage firm, the latter can provide it with the list of securities in the account as well as the new basis for each security.
Email your questions to [email protected].
Karin Price Mueller writes on Bamboo column for NJ Advance Media and is the founder of NJMoneyHelp.com. Follow NJMoneyHelp on Twitter @NJMoneyHelp. Find NJMoneyHelp on Facebook. Register for NJMoneyHelp.com‘s weekly electronic newsletter.