Tax Law (Questions About Taxes)/Regarding income tax


Mr. Stancil
Good evening

My question is regarding an income tax issue.
I am single & in my seventies.
The advice I seek is regarding an account (all in mutual funds)
which is my name & I pay income tax if any at end of the year.
After I pass away does my beneficiary get the step up value of the account. And what does happen loss carry forward & capital gains on this account.
Do I need a living trust to satisfy IRS  & safeguard the interest of my beneficiary?



Thanks for your question.

Upon your death, whoever inherits the mutual funds will get a stepped- up basis of fair market value as of the date of death.  The loss carry forward terminates on your death.  The capital gains will also disappear with the stepped up basis.

From a tax standpoint a living trust is unnecessary. Just have the beneficiary designated in your will or with the mutual fund company.

Hope this helps.

John Stancil, CPA  

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John Stancil, CPA


I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I am Professor Emeritus at Florida Southern College. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a CPA practice, specializing in tax, for over 35 years. I am a member of the National Association of Tax Professionals, The Florida Insititute of CPA's, The NCPE Fellowship. In addition I am a Certified Mentor for SCORE. Visit my website at I also offer seminars and consultations to churches and clergy on their tax issues at Also visit my blog, I am listed on Tax Connections at Prepare and file your own taxes at


I hold a doctorate in Accounting, and am a CPA. My certifications of CIA, CFM, and CMA are inactive. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 37 years and have taught accounting and tax at the college level for over 35 years.

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