Real-Life Situations




Question:


Last year I sold some stock I inherited from my father.  How do I figure out the gain or loss because I did not pay anything for it?



Answer:


In most cases, the tax basis of inherited property — that’s the value from which you will figure gain or loss when you sell — is “stepped up” to the value on the day the previous owner dies. Tax on all appreciation during his lifetime is forgiven.

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