Who pays the capital gains tax on inherited securities?
I had trading authority for my mother’s brokerage account.
My mother’s will distributes her assets equally to her three sons.
March 17: Mom dies
March 19: One brother expresses concern about the potential for loss of a portion of his inheritance because he is concerned about the stock market
March 20: I sell approximately 1/3 of mutual funds and equities to “protect” my brother’s share
March 27: the will is probated; the third brother becomes the executor
As of April 5 the brokerage account is frozen, awaiting transfer to an account in the name of the estate
Assuming that there was a gain in the sold-securities’ value:
Who is liable for paying capital gains taxes for the shares sold on March 20?
Does the basis for those shares receive a step-up to March 17 (date of death) values?
Is the gain treated as a long term gain?
In reporting the subsequent sale of securities by my (executor) brother and me, can we use as basis the price of those securities 6 months after the date of death, if that is more advantageous?
Thank you.