Personal Investments • Re: Does an estate have to pay CGT on precious metals

I don't know anything about Washington state income or estate taxes. I can speak to only IRS taxes.

Re: WA/USA IRS taxes
Question: Given an estate has a lot of assets in precious metals. The owner of the estate passes away. Does the estate have to pay Capital Gains on the gain in the metals, at the time of death?

In the US, all of your assets get a Step-up in value as of the day you die which resets your basis to day-of-death value. The estate then sells the assets and there can be a gain or loss since the day of death. I've never heard of precious metals being treated any different than anything else (real estate, investments, personal property, artworks, collectibles,...)

Note that the decedent could have bought a new car a year before she died and by time of death, it could be worth less, so the Step-up could bring down the "basis".

I have read that the CGT passes onto the heirs and they only pay taxes when they sell. But I have also read that the death of the owner of the estate triggers a CGT event and cap gains have to be paid, just as if the owner sold all of the assets on the date of death.

Which is it?

I assume "CGT" means "Capital Gains Taxes". If assets were not sold while the estate was being settled, the heir/seller just uses date of death value.

Please show us where you read the underlined information. I've never heard this and it would be very confusing to file taxes in two opposite ways to two different entities (federal vs state???). Or maybe you're thinking of WA estate taxes as opposed to WA income taxes. These are separate taxes that are unique to certain states. The federal estate tax refers to only any estate that is valued more than the estate tax exclusion, which currently is $13.61 million, and is adjusted for inflation each year.

Statistics: Posted by celia — Tue May 28, 2024 9:08 pm

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