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Politics : Formerly About Advanced Micro Devices
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To: northam who wrote (1567768)10/24/2025 6:50:14 PM
From: John Koligman  Read Replies (1) of 1570078
 
Have you by any chance read this piece?

propublica.org

Also, these people at time of death can pass on their shares with the basis adjusted to the date of death. It's a 'get out of jail' card forever.

Wealthy individuals pass on shares to heirs by setting up a transfer-on-death (TOD) beneficiary, including them in a will, or transferring shares into a trust. The executor or trustee handles the paperwork to transfer ownership, which typically results in the shares having a "stepped-up basis" equal to the market value at the time of death, thereby avoiding capital gains tax on the appreciation that occurred while the original owner was alive.

Methods for passing on shares



  • Transfer-on-Death (TOD) beneficiary:
    The shareholder designates one or more people to receive the shares directly from their investment account when they die. This avoids probate.



  • Last will and testament:
    A will can specify how shares should be distributed among heirs. The shares will go through the probate process, where a court oversees the transfer of the estate's assets, as explained by Fidelity Investments.



  • Trust:
    Shares can be transferred into a trust during the owner's lifetime. A trustee then distributes the assets to beneficiaries according to the trust's instructions, often bypassing probate.



Key tax considerations



  • Step-up in basis:
    A key benefit is that the cost basis for inherited stock is "stepped up" to the fair market value on the date of the owner's death. This means heirs will not pay capital gains tax on any appreciation that happened before the owner's death. They will only be taxed on gains from the date they inherit the stock onward.




  • Estate taxes:

    Federal estate tax is levied only on large estates, above the high exemption threshold ($13.99 million in 2025). The estate pays this tax before assets are distributed to heirs.



The transfer process




  • Executor/Trustee involvement:

    After the owner's death, the executor or trustee is responsible for managing the paperwork to transfer the shares.




  • Transfer to a brokerage account:

    The shares are typically transferred electronically to the beneficiary's own brokerage account, making it easier for them to manage or sell the stock.

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