LT versus ST

[Beersheba]

A decedent owns stock at the time of his death. Over the course of the next month or so, the trustee sells it.

Is this long-term or short-term if the decedent had owned it more than a year??

Paperwork from the custodian says it is short-term.

[TaxGuyBill]

Trustee? Is this in a trust? Was it revocable before death?

If you inherit stock, it is automatically long-term. I would think that same would apply if it was in a trust, but am not 100% certain.

https://www.irs.gov/publications/p544#en_US_2021_publink100072634

[Matt Sova]

Inherited property gets a step up in basis to the value at the date of death. When it is sold, it is treated as long term, regardless of the decedent's holding period.

[Beersheba]

Haven't heard from Sova in a long time. Great!!

If it is inherited it is automatically treated as long-term if sold by a beneficiary.

I wasn't plain enough in my original question. The sale actually occurs by the estate itself, not the beneficiary. How would that be reported on Form 1041?

[TomJ]

It's LT, not just to the beneficiary, but also to the estate. See instructions for 1041, which state: "Short-Term or Long-Term Separate the capital gains and losses according to how long the estate or trust held or owned the property. The holding period for short-term capital gains and losses is generally 1 year or less. The holding period for long-term capital gains and losses is generally more than 1 year. Property acquired from a decedent is treated as held for more than 1 year. "

[New York Enrolled Agent]

Haven't heard from Sova in a long time. Great!!

If it is inherited it is automatically treated as long-term if sold by a beneficiary.

I wasn't plain enough in my original question. The sale actually occurs by the estate itself, not the beneficiary. How would that be reported on Form 1041?

IRC 1014(b) includes sales by both the beneficiary and/or the estate. The 1041 sale would be reported as long term.

[kathyc2]

Haven't heard from Sova in a long time. Great!!

Interesting how a brand new poster would recognize someone from a long time ago. Also interesting that a brand new poster sounds a lot like a long time poster. Maybe all people from TN sound the same?

[New York Enrolled Agent]

Haven't heard from Sova in a long time. Great!!

I did wonder about that - now Kathy has shed some light

[Beersheba]

Interesting how a brand new poster would recognize someone from a long time ago. Also interesting that a brand new poster sounds a lot like a long time poster. Maybe all people from TN sound the same?

Your suspicions are confirmed.

Kathy2 - I am the long-lost Snaggletooth, My schedule has been so hectic that I haven't had time to address the name change, but the TMI people and I were tied up for 10 days trying to make my old name work, as for some reason it was knocked off. We gave up and I began posting as Beersheba, named after a nearby mountain town nearby.

There are some who believe using a different name is an attempt to hide your identity, but this is simply not the case at all. I live at 802 Parks St in Manchester, TN - and anyone in town can find me.

[dmj4]

[QUOTE=Beersheba;n307655]

Your suspicions are confirmed.

Kathy2 - I am the long-lost Snaggletooth, My schedule has been so hectic that I haven't had time to address the name change, but the TMI people and I were tied up for 10 days trying to make my old name work, as for some reason it was knocked off. We gave up and I began posting as Beersheba, named after a nearby mountain town nearby.

There are some who believe using a different name is an attempt to hide your identity, but this is simply not the case at all. I live at 802 Parks St in Manchester, TN - and anyone in town can find me.[/QUOTE

Hi, Snag. This is Donna (dmj4) from Dickson. If I remember correctly, your son lives in Dickson. Coincidently, my son now lives in Manchester. He is working at Arnold.

[Beersheba]

Yes I remember you. My son actually got into retailing in Fairview, but couldn't compete with the online business and gave up his store after 6 years. He now drives a truck to Louisville and back every night..

If you are doing taxes I would be happy to give you referrals as I am reaching the top of my availability. I have a couple in White Bluff that I can't get to anymore after this year. My email is cordfrog@charter.net if you are interested.