The VA Dept of Treasury - Unclaimed Property Division is holding approximately 46k (present value) in unclaimed assets. About 60 percent of it is cash and the other 40% is stocks. An estate has never been opened since I just learned of these assets. So, my question is, does any gain in the value of the assets AFTER the date of her death but PRIOR to the opening of an estate constitute income for purposes of estate income tax? If so, how do I calculate that for the stocks? Do I go by the basis of her purchase price of the original shares.....or by their value at her date of death... or by some other manner? May I just take the value as I receive it into the estate and then only consider any gain in valuation after that date?
Criminal Defense Attorney
It appears as if Virginia looks at the value of estate assets at the time of death for the purposes of the probate tax. Of course that is merely what the state requires.
You will also need to consider federal taxes as well. In my experience the IRS will tax the estate for the value as the sale price of the stock minus the value at the time of death. I have to point out that I have yet to see a situation quite like this one where the property is discovered this long after death so you will want to seek out a local probate attorney for guidance.
As administrator you will also need to consider any tax liability for your great aunt's last year of life. In Georgia the administrator is responsible for filing the last tax return for the deceased. If a tax return was filed an amended return may be necessary. In order to determine if this is necessary you will need to find out if the realized value of the stocks is enough to trigger additional tax liability. The stock value is usually determined by the difference between the value of the stock on the day it was purchased and the value on the date of death.
You will definitely want to contact a probate or tax attorney to assist you in this matter as you will be liable for any unpaid tax obligations as administrator.
This answer is intended only to provide general information in response to your question and is by no means legal advice. No attorney-client relationship has been created by this answer. Any information presented is not warranted to be error free and should not be relied upon as legal advice. You should consult an attorney in order to obtain legal advice for your situation.
Estate Planning Attorney
Generally, the income of the estate is only income after the death of the decedent, and the basis is the value as of the date of death. Speaking of which, you should also confirm that someone on her behalf filed a tax return for her last year of life -- if these assets sat unnoticed for so long, it may be that there are other issues that need to be wrapped up.
You should still contact a probate attorney or a CPA who handles estate tax returns regularly. You can ask them to prepare (or to confirm) only those specific documents, and that should keep the costs low (although with an estate this old, you may have additional issues you need them to address).
As the administrator, you have liability for mistakes that you make, so it is best to rely on professionals to take on the responsibility for these types of decisions. And it is especially best not to mess with ambiguous tax issues!
If you have questions, feel free to email me at firstname.lastname@example.org or call my office at (434) 296-7138.
I am licensed to practice law in Virginia. Please note that this answer does not constitute legal advice, and should not be relied on, as each situation is fact specific, and it is not possible to evaluate a legal problem without a comprehensive consultation and review of all the facts and court pleadings filed in the case. This answer does not create an attorney-client relationship.
Estate Planning Attorney
My colleagues are correct in their assessment of your fact pattern. Your best bet is to contact a local probate attorney that is also familiar with the tax code for assistance.
When responding to questions posted on Avvo, I provide a general purpose response based on California law as I am licensed in California. In reviewing my response, you are specifically advised that your use of, or reliance upon any response I provide is not advisable. I do not have all relevant background details or facts related to your issue / matter, thus I am not in a position to give you legal advice. Further, your review, use of, or reliance upon my response does not establish an attorney-client relationship between us nor does it qualify as a legal consultation for any purpose. For specific advice regarding your particular circumstances, you should consult and retain local counsel.