That understanding is correct based on Section 2040, which provides that to the extent you can prove the origin of the funds or property in a joint account, the contents of the account may be allocated accordingly for estate tax purposes.
If there is no filing requirement for a 706, the step-up will apply regardless of whether a 706 gets filed, but I always advise to file a 706 regardless of requirement to file in order to justify new basis and start the statute of limitations. Clients are typically averse to the extra expense.
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Matthew E. Rappaport, Esq., LL.M.
(516) 558-3377
mer@merlawfirm.com------------------------------
Original Message:
Sent: 03-26-2018 12:12
From: Gabriel Bentovim
Subject: INHERITED STOCK ACCOUNT
A client of ours died last year and left a brokerage account with Apple stock that was appreciated millions of dollars. The stock was left in an account that he changed to a joint account with only one of his three children. My understanding is if that account was funded entirely by him and the funds were never touched or removed then it is eligible to be thrown back into the estate and can get a step up in basis. My questions if the above assumptions are correct does the asset have to actually go through probate to get the step up or is it enough to simply inlcude the account on the 706 estate return.
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Gabriel Bentovim
HOFFMAN & BENTOVIM, CPAs PC
Commack NY
631-499-1500
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