Tax Law (Questions About Taxes)/Final 1040 and CG

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Question
William:
I understand that a final 1040 is required for the year of my demise. If I have stock, is the CG required to be reported on the final 1040, or can the beneficeries simply sell the stock, distribute the funds and not report any CG. Is that not similar to selling a house, where the sale price is assumed to be inherited without any consideration to any CG.
Hope you can help. Thanks for volunteering.

Answer
Tax Samaritan
Tax Samaritan  
Hi Nicholas, the capital gains are not reported on your final 1040, unless they were sold in that tax year. The beneficiaries report capital gains when sold.

The basis of property acquired from a decedent is generally the value placed on the property for federal estate tax purposes:

1) FMV on the date of the decedentís death,

2) FMV on the alternate valuation date if an estate tax return is
filed and alternate valuation is elected

3) Value based on actual use if an estate tax return is filed and
special-use valuation is elected.

Best regards,
Randall

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Randall Brody, EA, MBA, CCP

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