Stock in Trust Splits, Cashing Stock

Forum|Forum|3 years ago
November 12, 2022
1 reply
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Have stock in a irrevocable trust and ready to cash. trying to determine cost basis.

The challenge is, the stock split after it was placed in the trust.

Since part of the stock did not exist when my father passed away but I didn't purchase it, how do I determine the cost basis so I can sell the stock?

Also, if the trust sells the stock and transfers cash to me, the trust pays the taxes on selling the stock but so I also have to pay taxes for the money I received? Do i have to report it if the trust paid the taxes?

Please help!!!

Not A Product Question

Mike9241

You just have more shares with their total tax basis the same as the FMV of the original shares on the date of death.

a decision has to be made by the Trustee. distribute the capital gain by designating the cash distribution as such. then you pay the tax the trust doesn't or have the Trust pay the tax on the gain. in part, this may depend on what the trust agreement says about distributing corpus.

the trust should be filing an annual 1041. the beneficiaries of any income receive a k-1.