Got a surprise a couple days ago!

[oldsoldier]

wifes mom passed away last December. after all the stuff with the will and division of assets my wife inherited Kimball stock to the tune of $42,000. We're seriously thinking about selling it to get us closer to being debt free. Pay off the camper, one remaining credit card and maybe even the house. Anybody have any experience dealing with stocks? If we sell what percentage will we have to pay in taxes and such? I'm guessing we'll have to pay 20%-25% in taxes but I don't know. any help/ advice would be appreciated. This block of stock doesn't pay any dividends or whatever. So nothing really to gain keeping it.

She did get a larger "block" of stock that pays dividends that she is thinking of holding onto for a while yet. Thanks all.

[crashdive123]

You may be liable for capital gains taxes depending on what the stock was purchased for and what it sells for.

[Rick]

There is a difference between short term capital gains (1 year) and long term capital gains (held more than one year). The caveat is I don't know how it is taxed since it was inherited. I've never had that problem. A good tax lawyer could answer that question. It looks like the stock is down about 26% at the moment. Not a good time to sell.

[oldsoldier]

Thanks guys. Wife inherited them as her share of her mom's estate after she died. Her Dad worked for Kimball for 30 years, the stock was mostly part of his benefits package They rolled over, split and such building over the years.

[1stimestar]

Cool. But sorry for your loss.

[oldsoldier]

thank you. It's been over 7 months but it's still hard for the wife.

[Alan R McDaniel Jr]

Cost basis on inherited stock is value on date of death. You pay Capital Gains tax on anything increase in value from date of death.

Looks like Kimball Electronics is on the way up these days. May be advantageous to hold on to it and watch it for a while. It's gone up 30% since last October.

Alan

[1stimestar]

thank you. It's been over 7 months but it's still hard for the wife.

I can imagine.

[oldsoldier]

Cost basis on inherited stock is value on date of death. You pay Capital Gains tax on anything increase in value from date of death.

Looks like Kimball Electronics is on the way up these days. May be advantageous to hold on to it and watch it for a while. It's gone up 30% since last October.

Alan

Thanks Alan.
one of the "blocks" pays dividends, so we're going to sit on that one for a while. The other one is "plain" stocks and has just it's face value. So we're thinking sell it. Part of the reason for that is Wife's health issues which I didn't mention before. Barbara was diagnosed 3 weeks ago with hypothyroidism. It is bad enough that it will be a year or more before she gets back to "normal" which means she will not be able to go back to work ( she's a college professor) the end of August. We're working on the paperwork for long term disability through her work but she wont get anything for 3 months if it's approved. Even with that she'll get almost $2,000 a month less than she makes teaching. But depending how much we have to pay in taxes and broker fee's out of the smaller block of stock if we sell it we might be able to pay off our camper and one credit card we still owe on and maybe even the house ( owe less that $2,500 on house) That will save us about $1,500 - $2,000 a month. Putting us debt free or close to it. If we do that even without her disability we can pay everything else with just my paycheck.

[madmax]

I hope this all works out for you guys. Grief, illness, and financial worries are tough.

Prayers sent.

[Rick]

Yeah, I echo what Max said. Prayers sent for you guys. Getting older is no fun. The aches and pains tend to get more serious as time slips by.

[Alan R McDaniel Jr]

Make sure the stocks are not part of an IRA or similar program. You could end up paying more than you expect in taxes. Best thing is to ask a bona fide tax guy about the stocks and what you can do with them.

Alan

[oldsoldier]

I hope this all works out for you guys. Grief, illness, and financial worries are tough.

Prayers sent.

Thanks Max

[oldsoldier]

Yeah, I echo what Max said. Prayers sent for you guys. Getting older is no fun. The aches and pains tend to get more serious as time slips by.

Thanks Rick you've got that gettin old part right

[oldsoldier]

Make sure the stocks are not part of an IRA or similar program. You could end up paying more than you expect in taxes. Best thing is to ask a bona fide tax guy about the stocks and what you can do with them.

Alan

Alan Thanks for the advise. I don't think either of those are the case. If I'm correct these stocks were part of her Dad's purchases and benefits from working at Kimball for 30 years. When he died 20 years ago they went to her mom. Then split among the children when she died. I'll definitely check into that.

[Alan R McDaniel Jr]

You'll only pay the taxes if you withdraw the money from an IRA. If the owner had begun RMDs then you will have to take out an RMD each year. Another question for a professional tax guy. If they have not begun RMDs then you might be able to leave it be until your wife is 70 1/2 (a tax guy will know). But the good news is that it can continue to accrue value until the RMDs start. Then you pay at your rate at that time.

If it is not in an IRA (or similar) then cost basis is on date of the owner's death. Which in this case is good for you and your wife because then you will pay taxes only on increased value from that time till now, instead of the original purchase price.

Alan

[Alan R McDaniel Jr]

I'm no expert on this. I've just spent the last 2 1/2 years settling my grandmother's and my father's estates. I got quite an education. Best advice I've got is:

Get a lawyer and a tax consultant that you trust.

Alan

[oldsoldier]

Thanks again Alan. As soon as we get through all the paperwork for wifes long term disability ( through work) were going to start checking into what we need to do.