Cost basis for stock in a Trust
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Cost basis for stock in a Trust
I have a question about what establishes Cost basis for stock. In 1998 my step-father put some stock in an Irrivocable Trust that matures when I turn 60 this year. The Trust dept. said that the Cost basis for this stock is $1.00 which seems incorrect. When he put the stock in the Trust he names the Bank Trustee. The stock was worth $67.00 when it was put in the trust and is worth about the same now. My question is is I sell the stock do I use the cost basis of $1.00 or the $67.00 it was worth when given to me?
Asked on March 16, 2012 under Estate Planning, Ohio
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
You first have to ascertain the value of the stock when your step-father received the stock regardless when he placed it as a trust asset. If the trust was an estate planning devise and you are entitled to it after the passing of those who signed the trust, there is a chance that the basis of the stock may have been stepped up (increased) at the passing of those that signed the document (date of death).
Without reading the document I cannot give you a definitive opinion other than suggest that you consult with a Wills and trust attorney with respect to the trust document.
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