AboutWarren Boroson Expertise Author of "Keys to Investing in Mutual Funds" (Barrons), "Ultimate Mutual Fund Guide" (Probus), "How to Pick Stocks Like Warren Buffett" (JKLasser), and "The Reverse Mortgage Advantage" (McGraw-Hill). Former financial columnist for Gannett News Service.
Experience Author of 20 books; winner of 1996 Personal Finance award from Investment Company Institute and Washington University. Formerly on staffs of Money and Sylvia Porter's Magazine. Had a radio program (on WEVD) about mutual funds and a newsletter, FundDigest.
Expert: Warren Boroson Date: 7/28/2007 Subject: cap gains
Question Bought 60K Index 500 10 years ago reinvesting allNow worth
$140K.Need money but cap gain etc if redeem it grotesque. CanI leave it as is until I DIE (AM 87)knowing that inherited money i s not taxable and less it pass to my 3 kids. Would that wash out thier cap.gain responsibility?
Bill
Answer Dear Bill--
Yes, if you pass on, your children will inherit that money without owing taxes on your gains. Their tax basis can be the day you passed on or six months later.
But...
do you need money? Then you might withdraw some of the shares of your fund. You could withdraw the most recent shares you bought, so you have less in the way of capital gains. And remember: long-term gains are now taxed at only a maximum of 15%. In a few years, the rate probably won't be that low.
You're to be congratulated for thinking about your kids.
