[ElecEelweb]

I have an interesting situation which I'm hoping one of the experts can help me answer. I have asked three CPA/tax advisers and have received three different answers. So confused I am.
Here's the gist of it.

My mother, who was not a US resident, passed away in 1990. She left me some stock in her will. Her will dictated that I could only receive the asset after I reached the age of 35 (year 2000). I became a resident of the USA in 2002. I would like to sell some of that stock since it has appreciated by a bit but do not know what the cost basis of the stock would be.

The three answers I have received on how cost basis would be calculated are:

1. At the time of her death. (1990)
2. At the time of when the asset was in my control. (2000)
3. At the time of when I became a US resident. (2002)

Can anyone help?

Thanks.

[ebaines]

Cost basis on inherited property is almost always set to the fair market value as of the time of death of the decedant. See: Publication 551 (07/2011), Basis of Assets But please clarify what you mean by not having "full control" of the stock until age 35 - is that because a trust was established with this rule and the stock was transferred into the trust upon her death?

[ElecEelweb]

Hi ebaines, thank you for your reply.

Yes you're correct. It was in a trust shared between her children and transferred when we attained the specified age.

[ebaines]

Assuming that the trust itself paid no taxes upon the transfer to you, then your cost basis ought to be FMV as of date of death of the decedant. However, legally the trustee should be able to answer the question as to what your cost basis is.

[ElecEelweb]

Thanks again ebaines. The trustee established the cost basis at the time of shares distribution to each of the children. Before that, it was all in a combined amount. And since none of my brothers and sisters live in the US, they do not need to calculate cost basis as I do.

Hence my dilemma for different dates.