Tradisional Individiual Retirement Account and Mutual Fund
Quote at the bottom of pages of IRA.
ISSUE:
Written at the bottom of pages in the “inherited Trust” IRA and Mutual Fund:
If the cost and purchase date of transferred assets are not provided by the client, the date will default to 01/1/70, and the gain/loss analysis will be inaccurate. If the cost has been provided without the purchase date, the date shows as 01/02/70. (The date on the Traditional IRA is 01/01/1970 and is inaccurate.)
I married my husband in 1975, and we had a long-term marriage. After filing for divorce, his deposition was taken on two occasions, during which he testified that he had no other investments, such as an IRA or Mutual Fund—only his two retirement accounts with his Law Office, a Legal Corporation.
In 2012, my husband passed away intestate. Upon serving a subpoena, I discovered that he had left a Traditional IRA and Mutual Fund in a Trust to his new wife, whom he married in 1989. His investment firm, Ameritrade, provided this information.
A question arises regarding the accuracy of the purchase date of 1970 on these accounts, as Traditional IRAs were not available until 1984, according to historical records. I am gathering further information on this matter as part of my concealment case filing in the California Family Court. I look forward to your response.
Linda Lund, www.lindaklund.com
406 223 3669
Permalink Submitted by Alan - IRA critic on Mon, 2025-04-21 17:19
I can’t follow most of this, but cost basis does not apply to IRAs unless non deductible contributions were made after 1987 and documented on Form 8606. Otherwise, all assets in an IRA are taxable upon distribution from the IRA to the beneficiary, or estate or trust receiving those distributions. IRAs were first available in 1975, but the contribution limit at that time was only 1500 and was not deductible. A few years later contributions were deductible and in 1987 contributions could not be deducted for those covered by another workplace plan and with incomes above the national average. I doubt at this late date, unless clear tax records were available that the IRA would be treated as entirely taxable to the beneficiary.
If there were non IRA mutual funds left to a trust, the cost basis would have been stepped up to the date of death value. Your attorney would have to determine if that trust still contains a balance large enough to justify the costs of litigation, which for a case of this type is probably quite high.