common stock in joint tenancy
Can you confirm if this sounds accurate? When 1 spouse dies, and their common stock which is in joint tenancy, they were told that the account will be rewritten to a new account in just the 1 remaining spouses name and there will be tax consequences. Can you confirm what that entails? Thanks.
Permalink Submitted by Alan - IRA critic on Thu, 2023-11-02 16:10
This applies to a taxable account (not an IRA), and there is a basis adjustment to the DOD value on 50% of the share value in common law states, and 100% in community property states. This basis adjustment is usually a “step up”, but could also be a step down depending on how much was paid for the shares. There is no current tax impact until the surviving spouse sells the shares. If sold at a gain, it will be long term, not short term.