|
Posted by Phil Marti on May 22, 2008, 1:27 pm
Please log in for more thread options
>I have a client whose father invested in IRA's. The father died, and
> the son received the IRA's as the residual beneficiary of the account,
> and this money didn't go through probate (that's what he says).
As previously noted, if he's the named beneficiary of the IRA it doesn't go
through probate.
> For some reason, there was a transaction performed and part of the IRA
> was redeemed and immediately reinvested in the same shares. He claims
> it was a mess-up on the part of the broker. But the strange this is
> that he received a 1099-B for the "sale"of those shares.
>
> Of course, he has no idea of the cost basis of those shares or whether
> his father had any nondeductibe contributions to the IRA.
Something is missing.
If the IRA sold shares there would be no 1099-B, and basis in the shares is
irrelevant. If there was a distribution of shares which were subsequently
sold by the beneficiary from a taxable account there would be a 1099-R
showing the market value of the shares distributed, and that amount is the
basis in the shares distributed. If the shares were sold from an inherited
IRA we're back to no 1099-B and irrelevant basis.
You need to dig deeper. Question 1: What name is on the 1099-B? Question
2: What do the pertinent IRA statements show?
Irrelevant to this specific transaction but important for the beneficiary to
know is whether the deceased had after-tax money in any of the IRAs which
were inherited. That information comes from the decedent's returns.
--
Phil Marti
Clarksburg, MD
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
| 
Yahoo! 
Google 
Windows Live 
del.icio.us 
digg 
Netscape 
XML Sitemap