Entering cash into inherited brokerage account

Doug

I have set up a brokerage account for an inheritance I received.  No problem entering individual stocks with their cost basis, but I have an issue about cash.  I'm not sure how to enter an inherited amount of cash.  I'm not transferring in or out of another account, but just want to start with an amount of cash in this new brokerage account.  How do I do it?  Thanks!!

Tom Young

There's two ways to do this.

The first way is to deposit the cash in the brokerage Account and credit some sort of "income" Category, ("income" in quotes to indicate that it's not income for income tax purposes). 

The second way to do this is to deposit the cash in the brokerage Account and credit THE SAME BROKERAGE as the offset, e.g., [Name of brokerage Account] is entered in the Category field.

Personally I've taken the 1st route, INCLUDING the value of the stock received.  That leaves a clear marker in you Spending reports as to what went on in that year, i.e., your stock picking prowess wasn't the reason for your big gain in net worth.

If you don't care to see any effect of the inheritance in your Spending reports just ADD the stock and book the cash as described in the first sentence above.

Vetta

Tom Young said:

There's two ways to do this.

The first way is to deposit the cash in the brokerage Account and credit some sort of "income" Category, ("income" in quotes to indicate that it's not income for income tax purposes). 

The second way to do this is to deposit the cash in the brokerage Account and credit THE SAME BROKERAGE as the offset, e.g., [Name of brokerage Account] is entered in the Category field.

Personally I've taken the 1st route, INCLUDING the value of the stock received.  That leaves a clear marker in you Spending reports as to what went on in that year, i.e., your stock picking prowess wasn't the reason for your big gain in net worth.

If you don't care to see any effect of the inheritance in your Spending reports just ADD the stock and book the cash as described in the first sentence above.

I agree with Tom's option #1 -- all cash PLUS stock with a created "income" category, something like "Dad's Inheritance" or whatever is appropriate. You will want to note the stock basis values used by the estate; usually dod but not always. The lawyer or executor can tell you. You will need that come tax time.