I just inherited some stock from my uncle, and I know that he bought the stock for more than the present cost.
When you sell the stock, your tax bill would be based on the gain or loss on that $250.
Likewise, you can’t claim a loss for losses incurred while the original owner was alive.
If your uncle purchased the stock for $250, for instance, and the value had dipped to $100 by the date he died, then your basis would be $100. The executor of a large estate who files an estate-tax return can choose to set the basis at the value six months after the owner died rather than at the date of death.
Also, special rules applied to large estates that were transferred to heirs in 2010.
On top of the emotional turmoil that comes with such a major loss, there may well be an inheritance to deal with.
Whether it's large or small, such a windfall offers numerous opportunities for adult children, such as paying down debt, financing a retirement or pursuing new interests.Two-thirds of baby boomers are likely to receive inheritances totaling upward of trillion, according to Boston College's Center for Retirement Research.But it's easy for new heirs to make a mess of their parents' financial legacy. You'll need to meet some legal deadlines, and perhaps you can visit a financial planner to sketch out possible future scenarios.The laws governing inherited retirement plans, investment portfolios and homes are complex. But if you act precipitously, you can end up with an inflated tax bill or a huge vacation home you can't afford to maintain.Don't quit your job, start a new business, buy a summer home or dole out money to charity, says Joan Sharp, a certified financial planner and founder of Life Strategies, in New Castle, Del."You need to stop and take a breath, and don't jump into making big decisions," she says.