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Posted by Stuart A. Bronstein on April 24, 2006, 3:14 pm
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> If a man owns valuable stock in a Personal Holding Corp with
> a near zero basis, he can save estate tax if his children
> inherit the stock, compared to liquidating the company and
> having them inherit the proceeds. Right?
>
> But if his wife is the only heir, it won't matter one way or
> the other, since there is no estate tax either way. Her
> basis will be the same as his. Is that correct? (it will
> affect her estate, but that is not the question...)
First, it depends on whether or not they live in a community
property state, and whether the stock is considered the
husband's sole and separate property or the wife has some
legal interest in it.
In short, the wife gets a stepped up basis in the stock to
the extent it belonged to the husband, or all if it's
community property.
Stu
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