Author Topic: Inheritance Taxes Post FIRE  (Read 151 times)

Loren Ver

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Inheritance Taxes Post FIRE
« on: January 13, 2021, 10:24:20 AM »
I would rather have the people than the money, and I am blessed they thought of me before they went.

As for my questions:
The money is invested in all kinds of odd things via Edward Jones (cash, stocks, mutual funds).  I would like to move it out to vanguard and I would like to do it sooner rather than later, but I need to take into account what counts towards taxes and MAGI (ACA subsides).

In my research so far, it looks like gains will be taxed as long term capital gains even if I don't hold them for a year.  Is this correct? 

There is information on the Edward Jones site with the cost basis and gains information, I'm using that to determine possible income ramifications, just like i would for my normal investments.  Is that correct or am I missing something?  For example, there is some secured cash, (no gains or cost basis) if I removed that, it will have zero impact on my MAGI correct?

Any other obvious holes for me to fall into?

Thank you,

Loren






seattlecyclone

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Re: Inheritance Taxes Post FIRE
« Reply #1 on: January 13, 2021, 10:31:47 AM »
In my research so far, it looks like gains will be taxed as long term capital gains even if I don't hold them for a year.  Is this correct?

Yes.

Quote
There is information on the Edward Jones site with the cost basis and gains information, I'm using that to determine possible income ramifications, just like i would for my normal investments.  Is that correct or am I missing something?

Your cost basis will generally be the value of the asset on the date of the decedent's death. Is that what you're seeing here?

Quote
For example, there is some secured cash, (no gains or cost basis) if I removed that, it will have zero impact on my MAGI correct?

Seems right to me.

Loren Ver

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Re: Inheritance Taxes Post FIRE
« Reply #2 on: January 13, 2021, 01:17:25 PM »
@seattlecyclone Thank you for your reply!

To answer your question about the gains, the increase is about 10% overall, that seems to fit in to the amount of growth the market had from the time of death (Sept 2020) to when I got the funds (Dec 2020), so I believe so.  Many of the stocks were things like Microsoft that should have a lot less cost basis if it was measuring it as a longer term holding.

Loren