What taxes are owed when this inherited stock is sold?

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Q. I inherited a stock. Then the company was acquired and it’s an all cash deal. What are the tax implications? I used to receive dividends but I have no choice in getting this money.
— Investor

A. Thanks for your question.

So it sounds like your shares are being purchased for cash.

Assuming that is the case, the tax basis of your shares would be reset to the fair market value of the shares as of the date of death of the person from whom you inherited the shares, said Steven Holt, partner and chair of the tax law, trusts and estates practices Mandelbaum Barrett PC in Roseland.

But note that property received by inheritance is presumed to be held for more than one year and thus qualifies for long term capital gain.

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This story was originally published on April 13, 2022.

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