Wealth Events: Inheritance

What this video covers

• Why inheritance itself is generally not subject to federal income tax, and when federal estate tax actually applies
• How the stepped-up cost basis works on inherited taxable securities, and why built-in gains disappear at the decedent's death
• The alternate valuation date (AVD): what it is, when the estate can elect it, and why the magic number is six months not nine
• Why inherited traditional IRAs and 401(k)s retain their pre-tax character with absolutely no step-up in basis
• The tax treatment of inherited Roth IRA qualified distributions versus the SECURE Act 10-year rule for non-spouse beneficiaries
• The classic exam trap of selling inherited IRA shares tax-free using the step-up, and why this is always false
• How to compare taxable brokerage accounts, traditional IRAs, and Roth IRAs side by side when a customer inherits all three