The cost of anything is actually a little hard to pin down. Ask any accountant or business owner. Nevertheless, “cost basis” is incredibly important when it comes tax time, especially if it was a bequest or gift. So what if you inherited stock? It’s fairly common, but how do you determine the value for that? That’s the complicated calculus of the “cost basis.” If you think about it, stock represents a value that is forever changing on the basis of the market itself. Those ups and downs of the market can make it a bit difficult to calculate actual gain over the life of one individual. The wrinkle of how to count for those changing values when stock passes from the hands of that one individual to another makes the wrinkle more challenging. For a basic introduction to “cost bass” and the value of inherited stock, consider reading a recent Kiplinger article titled “Cost Basis for Inherited Stock.” When arranging your estate, planning for your assets means understanding what those assets are and their value to your heirs. Accordingly, this notion of cost basis is vital to you and your heirs.
Reference: Kiplinger (April [edition], 2013) “Cost Basis for Inherited Stock”
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