Hello - long time lurker here. Finally registered so I could post this question:
TL;DR: need help with tax implications of transferring inheritance from Edward Jones to Vanguard (VTSMX) and using it to buy a new house/land outright. And selling a commercial business. And selling a home.
BACKGROUND: My grandmother passed away in March and left a huge inheritance to her 4 children, my mother being one of them. Husband and I are mustachians but FIRE and the 'Mustache Way' are very new to my mom. She came to us wondering what to do with all this money and we immediately started crunching numbers and helping her to FIRE. The problem I'm having is that we are still in the very early stages of FIRE and haven't had to deal with reality of it (including taxes). My mother is trusting us and I don't want to let her down so I thought I'd ask for some help here.
BREAKDOWN OF INHERITANCE/INCOME: My grandmother had all of her investments with Edward Jones. For tax reasons, it had to be divided and dispersed to the 4 siblings a month or so ago and she currently has about $562,600 in an Edward Jones (EJ) account. It's broken down as such:
Cash & Money Market 21.9%
Bonds & CDs - Fixed Income 17.6%
Mutual Funds - @ EJ 51%
Exchanged-Traded & Closed End Funds 9.6%
My grandmother also had a home on 6.5 acres, a 195 acre farm, and some land near a gas station which they are working on selling. After it is sold and split four ways, my mother should receive this based on a conservative, educated guess:
House $53,750
Farm $195,000
Land Near Gas Station $22,500
My mom also owns a business that she has been running for 10 years but has been wanting to sell for many months as her heart is no longer in it. It is currently closed and we are looking for a commercial broker so that we can then get it appraised but a conservative, educated guess (after some research and comparisons) would be about $50,000-$100,000.
My mother also wants to sell her suburban home and move to a few acres with tiny house on a trailer. After talking with the realtor about selling her house and looking at her unpaid principal, she'll like net $50,100 from the sale of her home. There is a friend's property she is interested in that is about $190,000. We haven't even looked at it yet and the friend's husband isn't even sure if he wants to sell it. If he doesn't or if it's not what she wants, then she'll buy some land and then buy a tiny house for it. That'll run her about $150,000 (not including permits, water, electric setup if needed).
Other items of note: These numbers do not include anything from the estate sale or auction for the items within my grandmother's home (and there are some nice things in there). My mom also has an IRA from her teaching days that has about $60,000 in it. Also, she has enough money to live on without touching any of these investments, etc until January 2018.
EJ $562,600
House $53,750
Farm $195,000
Land Near Gas Station $22,500
Business $100,000
Sale of Home $50,100
New House/Land - $190,000
TOTAL $793,900
THE PLAN: My mother's FIRE number (without a mortgage) is $680,500 so she's good IF everything happens the way we think it will. The plan is to transfer everything from Edward Jones into Vanguard Total Stock Market Index Fund. Any inheritance or gains from sales she gets will also go into the Vanguard. Depending on when she finds a new house/land, she will be taking approximately $150,000-$190,000 out of the Vanguard to pay for the new house/land. She will be buying and moving to the new house/land before trying to sell her home (it is not feasible for her to sell her home while still in it).
THE QUESTIONS:
-Will we be able to transfer all the stuff from EJ to Vanguard without being taxed a large sum? and without a big headache?
-Will she have to pay crazy taxes on the income from selling her business?
-After research, I know she doesn't have to pay an inheritance tax on any of this stuff, but she will have to pay tax on any dividends/gains. I'm also assuming she'll have to pay a large tax amount for taking $150,000-$160,000 out of her Vanguard. Is that right? Is there something I'm missing that will lessen her tax burden?
-Should she leave her IRA alone or try to transfer that to VTSMX as well? I'm unsure where it is currently being held.
I'm assuming that this might just be a crazy year for her in terms of taxes but it'll be worth it because she'll be in a dream home/land and be FIRE. Any help or guidance or advice would be greatly appreciated!!! My mom is really trusting us to help her with this (she's never really been good with finances) and I really don't want to screw this up for her.
Thanks!