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I recievied about 140,000.from my dads trust. their was no…

I recievied about 140,000.from...

I recievied about 140,000.from my dads trust. their was no cost bases for the funds whiich was franklin california tax freeincome fund a. i did some reaseach and the stock at inception in 1977 was 7.49 a share. the lowest it has been in is 6.49 in 2004. it sold for 7.44 on 12/17. The accountant says i dont ge a step up from when my father died 6 months ago because it was in the trust and had no cost bases. my question is can i use the lowest cost for a cost bases. or do i have to pay tax on the sold price?

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Answered in 4 minutes by:
3/26/2018
Chad EA, CDFA®, CFP®
Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional
Category: Capital Gains and Losses
Satisfied Customers: 2,643
Experience: IRS Licensed Enrolled Agent, CDFA ® CFP ®, MBA
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In my opinion, there would not be an issue using the lowest historical price of the fund. However, if you can not prove the cost basis the financial decision is up to the auditor, in the worst case scenario. Obviously, your father had to purchase the funds for some amount.

___

I would check with your fathers broker and request trade conformations, if any.

__

Also, keep in mind that the this Franklin fund does pay dividends which are subject to tax (not always taxable, but subject to tax) and added to the cost basis when reinvested, if reinvested.

Please let me know your follow up questions.

Thank you

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Customer reply replied 3 months ago
The broker has no cost bases on file. it's been about 20 years ago. My dad did pay taxes on the dividends up untill 3 years ago when the tax people told him he did not need to file anymore because his income so low.that he did not need to file because of his low income.

In this scenario, I would feel comfortable reporting the lowest cost basis of the mutual fund, but the final decision is at the discretion of the auditor in the worst case scenario.

Chad EA, CDFA®, CFP®
Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional
Category: Capital Gains and Losses
Satisfied Customers: 2,643
Experience: IRS Licensed Enrolled Agent, CDFA ® CFP ®, MBA
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