Quote:
Originally Posted by jstef
He would owe income tax on the amount that exceeded his cost basis.
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Correct. Inherited items have what's called a "stepped-up" basis--meaning that you use the value at the date of death rather than having the original owner's basis passed along. (Unless it's a stack of Joe Charboneau rookie cards.)
PolarBear, you're correct that you wouldn't owe taxes on the $50,000. But if you put the money in the bank you would owe taxes on any interest it earns.
Bill