Move Stocks to new Account

volvogirl

I'm moving my individual stocks into a new Wells Fargo Brokerage account. So far WF has only transferred my actual certificates. One stock has reinvested dividends and was a mess when I tried to move just the certificate shares. I wanted to keep the cost basis right and I don't think it let me pick the right lots? So I just did a remove 200 shares for the original certificate and add shares to WF. That seems to be ok. But in WF it shows my $2,400 cost as a + in the inv amount and cash amount and zero in cash balance columns. Is that right?

What should I do when WF transfers the plan shares from the reinvested dividends? Do or will they need to come over individually with the costs?

Now my second stock I don't reinvest the dividends so it's just the 137 shares certificate that got moved into WF. So I assume remove and add will be ok? Or should I use the official way to move it like Shares transferred between accounts?

NotACPA

Are you moving the entire existing account to WF? If so, why not just rename the existing acct?

volvogirl

Huh? I have individual accounts for each stock. They are not already in one account. I'm consolidating them into WF.

NotACPA

I didn't know that you had multiple accts that you're consolidating.

I'd take a backup and then use "Shares transferred …".

How are the shares from those reinvested dividends held? At the current brokerage?

volvogirl

The reinvested dividend plan shares are held in EQ Shareowner Services. Wells Fargo is doing the actual moving. They were able to transfer my certificates directly no problem (even though they were Joint). The wrinkle is my husband died this year and I/they need to first transfer the Joint acct plan shares into only my name and then they can move them.

NotACPA

OK, so the shs from reinvestments are, in reality, held separately from the certificates.

SO, you might need to do 2 "Shares Transferred …." per existing acct. 1 for the certificates and another for those held at EQ.

OR, you could just say To H… with it and move all of the shs in any existing acct to WF and wait for WF to catch up.

q_lurker

If you have all the lot detail in a Quicken account, I would encourage you to keep that detail available by using the Shares Transferred function. Not sure what the status might be with respect to stepping up the basis. I doubt it applies, but just want you to be cognizant of the possibility.

volvogirl

Good point. I'll have to check into that if I get a step up. Hmmm, wonder about my Vanguard mutual funds, do they get a step up? I am a buy and hold investor. Bought way back in the 80s and haven't sold anything. Except I just sold my PGE since it was way down and they haven't been paying any dividends. And I didn't need to get a transfer Medallion to put it in my name.

Yes all the transactions are in Quicken. Can I just add the shares and use the average cost and use that if I ever sell some?

Rocket J Squirrel

@volvogirl I think you get a full (sometimes called "double") step-up in basis on all joint assets because CA is a community property state. You just need to know the fair market values on date of death. The brokerage should have handled this for you at the time. I hope they did.

q_lurker

Yes all the transactions are in Quicken. Can I just add the shares and use the average cost and use that if I ever sell some?

Average cost? That is tax advise I am not qualified on, but I expect you could do that. But why force that commitment now, if you have all the detail. I don't think there is any risk to the Shares Transferred function.

q_lurker

If you get that step-up on any account, then Remove Shares from the old account and Add Shares as one lot with the stepped up basis and associated date makes a lot of sense. While that date and basis may show in the download from the brokerage, often the download does not include those items. You can edit and add the info.

Rocket J Squirrel

Found it in Pub 551.

In community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin), married individuals are each usually considered to own half the community property. When either spouse dies, the total value of the community property, even the part belonging to the surviving spouse, generally becomes the basis of the entire property. For this rule to apply, at least half the value of the community property interest must be includible in the decedent's gross estate, whether or not the estate must file a return.

Tom Young

One approach that can work here to make it easier on yourself - at the cost of some lost information - is to "sell" all the shares of a security in the old Account, transfer the "cash" to the new Account, and buy the same number of shares as one lot at FMV at date of death. ALL the shares are "long term", ALL the shares get the stepped up basis, so lot-level information isn't all that important, at least for taxes .

You just need to remember that even though Quicken reports the gain/loss on sale as "short term" for one year after the "Buy", it's reported as long term for taxes.

Chris_QPW

Note California has a 100% step up in basis for community property upon the spouse's death:

And reading the Federal step up it seems the same.

The way I read that is for securities and your properties (house) the old cost basis is no longer important (subject to the limitations).

The cost basis will be what it was at time of death of the spouse.

One exception would be IRA accounts. For Roth IRAs since the taxes are already "prepaid" before investing you can just assume ownership and you wouldn't pay any taxes on any sell. For a regular IRA it seems to me (but I don't know for sure) you don't get this really good deal of the change on cost basis because in fact the cost basis already doesn't matter. When withdrawing from a traditional IRA the cost basis is basically zero, you pay based on your current tax rate.

volvogirl

Thankyou everyone for your help and input. Since it seems I get a full step up on all the shares (yeah) I've determined I need to make 3 entries for my 952 shares moving into the new WF account. So on the Transfer dates………

1. Add original 200 purchased shares at step up price with acquired date 1985
2. Add 722 shares for reinvested dividends up to death at step up price and acquired date 3/16/23 death. Won't split between short term & long term. Don't think I'll sell before next March.
3. Add 30 shares for reinvested dividends after death at transfer date and actual price. Maybe enter the 3 individual dividends. Might help with short term & long term if I sell them before a year.

Does it matter if some of the older reinvested dividends were more than the price at death?

Rocket J Squirrel

@volvogirl

Does it matter if some of the older reinvested dividends were more than the price at death?

All the assets receive an adjusted basis of the fair market value on date of death.

If you had assets whose basis was higher than the DOD FMV, those must, unfortunately, take a step down in basis.

volvogirl

I did sell another stock in November that I thought I had a 3,000+ Loss. But if it has a step down then I have a gain? Tell me it isn't so.

Cost basis was 7,200

DOD FMV 3/16/23 $16.16/share ~ 3,700

Sell at 17.17 for 4,200

Rocket J Squirrel

I did sell another stock in November that I thought I had a 3,000+ Loss. But if it has a step down then I have a gain? Tell me it isn't so.

It is so.

The same rules apply to your house and land. You need an appraisal based on or around date of death. If you didn't have one done, an appraiser can look at your property now and apply comparable sales from around that date to provide a new adjusted basis.

volvogirl

Yes I did my house. We bought for 230,000 it's worth 800,000 at dod. Thought I only had 1/2 step up but I get full. Good because as future Single I only get the 250,000 exclusion.

Chris_QPW

Looking around, I saw one financial advisor say that the brokerage is supposed to do this step-up calculation for you and set that in the securities you own. That would be a good thing to check with your broker.

And from what I have seen @Rocket J Squirrel is correct even though most people call it step-up in can go either way. But I also found something that might be of interest to you, and that is what accounts are considered "community property" and as such subject to this.

One might think that because your name is on the account that "you own it". According to this article that isn't true in community property states.

https://www.kitces.com/blog/capital-loss-at-death-step-down-gift-carryover-split-double-basis/

Section "COMMUNITY PROPERTY TWISTS TO THE STEP-UP/DOWN-IN-BASIS RULES FOR MARITAL PROPERTY"