Instead of transferring cash to recipient of bequest, shares were transferred and not reported on the 1099-B to a non-spouse. From what I understand, they should have been reported and the Estate needs to pay tax on them. Is this correct? What is the basis for the new owner - I assume the sales price?
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Were the shares jointly held?
What should the estate be paying tax on? If the estate didn't sell the stocks there wouldn't be taxable gain.
If inherited, basis is fmv on date of death."Taxation is the price we pay for failing to build a civilized society." ~ Mark Skousen -
No, no joint ownership. What I was questioning is if shares can be transferred to a beneficiary due to a bequest with no tax consequences. I did a bit more research - TTB - Gear up - online but could not find an all inclusive answer. My conclusions though agree with your last statement that these shares were inherited. Doesn't matter if passed on due to bequest or through regular bene procedures.Comment
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The estate can transfer any asset to the beneficiary. It's recorded as a distribution at fmv. It's not a sale. Not sure what tax consequences you're thinking of."Taxation is the price we pay for failing to build a civilized society." ~ Mark SkousenComment
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