Stocks

Question 1

Inherit stocks

Answer 1

1. Stepped up basis for the receiver to FMV (No NBV needed)
2. holding period is long term - regarldelss of how long you own it.
3. For alternative evaluate date I can use six months after the death or distribution date, whichever is earlier
4. if alternative evaluation date is selected use the price at that date - not the FMV
   -Holding period for alternative date it will also be long term

Question 2

Gifts stocks

Answer 2

Rule I: If FMV > NBV (appreciated) use rollover - meaning use donors NBV
–All I do here is multiply number of shares times the amount per share
–Holding period will be the date the donor purchased the stock

Rule II: If FMV < NBV (deprecated) the basis & holding period depends en el precio que la persona que recivio el stock lo vende.
–If sold for more than donors NBV then use donors basis - gain - and same holding period
–If sold for less than FMV use FMV - NO ROLLOVER holding period - USE date of GIFT
–If sold in the middle of FMV & NVB - NO gain or loss - No holding period

*** For rule II if the donee does not sell the gift stock $0 to recognize

*** If exception applies the holding period will be when the receiver sold the gift stock

***If a gift stock baisc was a $3000, FMV was $2000 and the taxpayer sold for $4000 the exception will apply and I will use the $3000 for tax basis minus $4000 to see my gain or loss. Holding period will be the donors holding period long or short term.

*** If a gift stock basis was $3000, FMV was $2000 and the taxpater sold the for $1500 the exception will apply and I will use the $2000 tax basis minus $1500 to see my loss. The holding period here wil be how long the taxpayer hold the stocks for.

Question 3

Split Stocks

Answer 3

Ignore value from received stocks/split stocks if I sell of of them -
~Meaning if I bought 100 stocks for $200 per share totaling $20,000. and they split 2-1 - now I have 200 stocks value a $100 per share.
–So if I sell all 200 stocks (No need to do math from difference between before and after split) Just subtract the total from the original 100 stocks purchase minus the cost of money received when sold