How to add shares that were inherited IRAs and get correct cost basis entered ?
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tas99
Member ✭✭
I have Q17 for Windows, I recently inherited securities from both an IRA and Roth IRA. Do I create 2 new accounts then import the securities from the financial institution? How do I get the cost basis added? When I tried to import all line items created Placeholder transactions b/c it doesn't show cost and it thought I bought them (it did not add shares). Thank you.
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Best Answers
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You need to check with a Tax Advisor (which we're not) regarding these transactions.Because I'm not willing to speculate upon the situation regarding those 2 accounts.I don't KNOW if those continue to be IRA/Roth type accounts ... or something else.Normally, for an inherited investment, the cost basis is the value on the date of death of the prior owner .... but even that depends upon the relationship between you and that owner.
Q user since February, 1990. DOS Version 4
Now running Quicken Windows Subscription, Business & Personal
Retired "Certified Information Systems Auditor" & Bank Audit VP5 -
For tax purposes there is no step up within IRAs.Given the Quicken programming around IRAs the best way to deal with this situation if you do want to step up the basis for your own purposes is a series of "Remove" actions, (assuming you have the Accounts already set up and populated within Quicken), and "Add" actions. The Remove action deletes a given security from the Account, the Add action then re-establishes the security as one "lot", (which it is). You'll specify the per share price as appropriate. It really doesn't matter what "date acquired" you use since "long term" and "short term" just isn't a concept within the IRA.6
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I assume these accounts of your father's were not in your file to begin with.
I have recently (a year ago) been through that process after my mother-in-law passed. My case involved the original IRA at Morgan Stanley going to several inheritors using several other Financial Institutions (FI). MS initially created Inherited IRA accounts at MS for each and transferred the share to each inheritor. They then sold all the securities and transferred Cash to Vanguard, our selected FI.
Can't remember the specific details, but I believe I created the account (at Vanguard) manually to begin with (no online connection). I create such manual accounts without securities in Quicken as a start, then I use Add Shares transactions to populate the account with the applicable securities.
I chose to do Add Shares for each lot of each security specifying the original cost basis and acquisition dates. I am not sure that detail is needed for either the Roth or Traditional IRA, but I bias my Quicken data toward more detail rather than less. I then manually replicated the sales of all to cash. Once all cash, I made the online connection to Vanguard and moved forward from there as the account was reinvested to meet current expectations.
6
Answers
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You need to check with a Tax Advisor (which we're not) regarding these transactions.Because I'm not willing to speculate upon the situation regarding those 2 accounts.I don't KNOW if those continue to be IRA/Roth type accounts ... or something else.Normally, for an inherited investment, the cost basis is the value on the date of death of the prior owner .... but even that depends upon the relationship between you and that owner.
Q user since February, 1990. DOS Version 4
Now running Quicken Windows Subscription, Business & Personal
Retired "Certified Information Systems Auditor" & Bank Audit VP5 -
Thank you for your comments. To me, these are inherited IRAs (from my father) and I am familiar w/the tax implications. I am not familiar w/the best way for me to create the accounts in Quicken. To further complicate things, the accounts were created at Wells Fargo Advisors (WFA) and will be transferred to Charles Schwab (where I hold my assets). I am wondering if I should just wait until the accounts are funded at Schwab and then create those accounts or create the accounts through WFA then create the Schwab accounts and 'move shares'). I want to ensure as much transaction detail but I also don't want to jump through more hoops than needed.
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I agree you should consult a tax advisor.
If they are actually inherited IRAs, the cost basis of the securities doesn't matter and you should be able to set up the accounts as regular and Roth IRAs in Quicken, manually Add the shares to the accounts with the current price, then connect the accounts to Schwab.
Don't count on Schwab to download the correct transactions to set up the initial share balances; you may have to delete whatever they download to put the shares in the accounts.
I assume you don't care about tracking the performance of the securities before you received them.QWin Premier subscription1 -
For tax purposes there is no step up within IRAs.Given the Quicken programming around IRAs the best way to deal with this situation if you do want to step up the basis for your own purposes is a series of "Remove" actions, (assuming you have the Accounts already set up and populated within Quicken), and "Add" actions. The Remove action deletes a given security from the Account, the Add action then re-establishes the security as one "lot", (which it is). You'll specify the per share price as appropriate. It really doesn't matter what "date acquired" you use since "long term" and "short term" just isn't a concept within the IRA.6
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I assume these accounts of your father's were not in your file to begin with.
I have recently (a year ago) been through that process after my mother-in-law passed. My case involved the original IRA at Morgan Stanley going to several inheritors using several other Financial Institutions (FI). MS initially created Inherited IRA accounts at MS for each and transferred the share to each inheritor. They then sold all the securities and transferred Cash to Vanguard, our selected FI.
Can't remember the specific details, but I believe I created the account (at Vanguard) manually to begin with (no online connection). I create such manual accounts without securities in Quicken as a start, then I use Add Shares transactions to populate the account with the applicable securities.
I chose to do Add Shares for each lot of each security specifying the original cost basis and acquisition dates. I am not sure that detail is needed for either the Roth or Traditional IRA, but I bias my Quicken data toward more detail rather than less. I then manually replicated the sales of all to cash. Once all cash, I made the online connection to Vanguard and moved forward from there as the account was reinvested to meet current expectations.
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