Should I use a CPA if I have Capital Gains?

herky5

I received an inheritance this year. One of the items was a non qualified taxable brokerage account that is subject to capital gains. My understanding of the account is that there were no or little gain to the account so I am not concerned about the amount of tax. I am wondering how difficult that part of the filing process is however, as I usually have a very basic tax process. Will it be fairly easy to do in the free tax usa platform, or should I use a CPA for filing to ensure it is done correctly? I also received an inherited IRA that has already had some of the taxes taken out—same question—will that be easy to process in the tax filing process?

AlexO

Hello, herky5!

That is a great question!

You should note, that if you inherit property, you generally receive a stepped-up basis. This means that your basis in the stock held within the brokerage account may be the value of that stock at the date of death.

For more information on determining the cost basis of inherited property, see the link below:

https://www.irs.gov/faqs/interest-dividends-other-types-of-income/gifts-inheritances/gifts-inheritances

When you do sell these capital assets, reporting the sale within FreeTaxUSA is simple. You'll report the stock sold by selecting 'Income' > 'Stocks or Investments Sold (1099-B)'. You can report the sales as either a summary or as individual sales. If you have many sales, my recommendation is to report the sales as a summary.

When you receive distributions from the inherited IRA, you'll receive a Form 1099-R. The Form 1099-R will be entered within FreeTaxUSA by selecting 'Income' > 'Retirement Income (Form 1099-R)'.