What do you do about taxes when being named a beneficiary on a mutual fund account?
June 4th, 2010
I will be receiving a mutual fund account that I was named a beneficiary on. My question is how or if I will owe taxes on it? I’m not sure of the amount of the fund, but if it is transferred into my name what do I do? Or can it be sold off first, and then transferred. What do you know about taxes on this matter? Any suggestions are helpful as to what you would recommend. Thanks.
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I assume the person has died and you are the beneficiary. You need to ask the mutual fund company what the value per share was on the date of death. That is your cost basis when you sell the shares.
Normally the estate pays the inheritance tax based on the full value of all assets. Once the taxes are paid you would receive whatever monies remain in the account. The executor of the estate should be able to give you the details
The transfer isn’t reportable income. If you keep the money in the mutual fund and they do a distribution of capital gains or pay out dividends, you’ll pay taxes on that amount.