Greetings all,

I was just informed that I am one of two beneficiaries of an investment account - it's not an IRA or a trust - just a simple brokerage account managed by a financial advisor.

My understanding is that my cost basis on an inherited account is the financial value of the account on the day of the original owner's death. So, this means I would owe tax on any appreciated amount between the time the original owner passed, and the beneficiary.

Is this correct? I am in Virginia, if state law matters. Is there anything else I should be aware of for inheriting funds like this?

Provided the estate is relatively small, your basis is the market value at the time of the person's death and reguardless of the decedents holding period, your gain or loss will be long term. For larger estates (in excess of $5.49 million), the executor could choose an alternate valuation date six months after the date of death.

This message has been edited. Last edited by: trapper189,

IANAL. But I did got through this process with my parents estate.

The cost basis on the holdings of the account will reset on the date of the owner's passing. If the beneficiary continues to to hold the securities, they won't get taxed until they sell. When they do, the cost basis will be as described above.

This is for federal. The states can be all over the place.