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Were you or the other beneficiary receiving the income from the trust over the last 20 years?
Since CA does not now have an inheritance tax, there would be no tax that you would be subject to upon receipt of the trust principal.
As you stated, you should be furnished with the income tax basis of the securities transferred to you and that would be your tax basis for purposes of computing capital gain or loss upon sale of the securities.
You will also be subject to the income generated by the investments you inherit & if the investments consist mainly of mutual funds, you should make sure that you keep all of the mutual fund statements on a going forward basis.
If the dividends (either ordinary or capital gains) are re-invested, they will never-the-less be taxable to you when paid; if the dividends are re-invested each re-investment is a purchase of additional mutual fund shares and must be accounted for as such in your records.
If you need to contact me again with any tax or financial questions, you can just ask for "Steve G" at the beginning of your question. Again, please remember to rate my response. Bonuses, where you think they are warranted, and excellent ratings, are always most appreciated. Thanks again for using JustAnswer.com.You may get a short survey from the site; if it isn't too much trouble I would appreciate it if you would answer it; the survey results are used to rate our performance;
Stephen, thank you for the answer, I will look to you for other tax queries in the future. Would you terribly mindincluding this follow up question to the information you gave me.
The securities when distributed actually go to 2 people, me and someone else, i.e. 150 shares, I get 75. I presume that my self reporting this fact and paying only half of the tax due for 2013 prior to dissolution is sufficient. If the official dissolution and transfer of securities for example could be September 15, 2013. I take this to mean there will be a calculation for 2013 for the entire trust up to 9/15 from which the other beneficiary and I will split, and there will be a separate calculation for my own taxes for everything after 9/15. The up until 9/15 trust tax will be paid to the tax id of the trust, is this all correct?
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