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My husband unexpectedly recently died...and would truly appreciate your assistance with this question..

My husband placed funds in a brokerage a number of years ago-as a holder account for our son. He specified our son as the beneficiary and myself as conditional beneficiary. My husband had planned to eventually fuse this account with our major joint accounts. Our son would like to assign the account of to me--


1. What be the tax implications for either of us if the account is signed over to me? There would be no penalties/fees from the brokerage firm for the sign over.
2. What is the best strategy for proceeding toward minimizing tax issues

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In addition to Pam's advice on the value of the estate, there's also the issue of the value of the securities at time of death.

I haven't done any research on this issue recently, but it was my understanding that securities are valued as of their date of death value for purposes of inheritance. In order words, if your husband bought the securities years ago and they increased in value, there would be capital gains taxes if sold or transferred.

If, however, they were transferred on the date of death, through a will or trust, the value is stepped up to that date of death. In other words, they're revalued so that the date of death is the new value for purposes of calculating capital gains.

Assuming this is still the situation, unless the stocks soared in value, you would have minimal if any cap gains.

VegasLady is a regular poster here who worked for the IRS. She may have some better insight into this issue than I.

But I would still definitely consult an accountant who specializes in transfer on death assets (some aren't familiar with these issues at all) or the attorney who drafted the estate planning documents.

Our estate planning attorney was also a tax attorney and was very helpful in sorting out these step-up value issues.
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Your son can refuse his rights to the account, in writing. The Executor has to then go to the next beneficiary, yourself. Tax implications depend on the total amount of his estate and the state laws where you live. I would strongly recommend a tax consultant for 2014, one with expertise in filing your husband's final return. Don't wait until the end of the year, see him now.
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