How Will Securities in Inherited IRA be Valued When They are Sold?
I inherited a traditional IRA from my mother; I am the sole beneficiary. I am leaning toward liquidating the securities but I wanted to understand how that is accomplished. I assumed that the date of death was the valuation that would be used when the securities are sold, but JP Morgan says, “If securities are liquidated to fulfill this request, market price is not guaranteed.” When I ask what is the date for market price they won’t answer. Is there a way to determine the date of the market price? Date of death OR the date of the cash out?
I think we’re mixing up a few different things here. The date of death value is irrelevant in this context; the securities will be valued as of the sale. My guess is that JP Morgan is simply saying that market prices for securities fluctuates from day to day and even at different times during the day. So they’re not guaranteeing that the value of your portfolio that you may see on-line is what you’ll actually receive when it’s liquidated. It may be a bit higher or lower.
The date of death value is also irrelevant with respect to taxes in IRAs. For non-retirement accounts, it establishes the basis for determining capital gains when securities are sold. But this is irrelevant for IRAs. There are not taxes when securities within IRAs are sold, only when the cash is distributed, at which point it is taxes as regular income, not as capital gains.