Inherited Capital Losses
My father passed away with $200,000 in carryforward capital losses. As the sole inheritor, do I get to use those capital losses or are they wiped out?
My father passed away with $200,000 in carryforward capital losses. As the sole inheritor, do I get to use those capital losses or are they wiped out?
Permalink Submitted by Alan - IRA critic on Mon, 2014-03-24 18:36
Unfortunately, they are erased. Once a taxpayer enters what appears to be his final few years, some planning on using cap losses is beneficial. That would include realizing enough losses to reduce ordinary income by the max 3,000. The planning would also retain investments with large cap gains that would be inherited with a stepped up basis as well. Realizing these gains also offsets realized cap losses and makes if more difficult to realize enough losses to offset ordinary income.