My elderly mother has shares in a brewery overseas. There is very little earned in the quarterly dividends when converted to USD. The value in the stocks is when it is sold, approximately $50K today. Both of our names are on the certificate. I am her POA. Is it best to let the stocks remain overseas, sell or try to transfer to the US? I understand while she is living, we would incur capital gains tax, but I am not 100% sure.
Terry Says: This is an interesting question, especially as I have just written a column on Capital Gains taxes for those in lower income brackets. If the shares were only in her name, or if she could report the gain on sale only on her tax bracket, if she has income under $37,450 in 2015 (including the gain on the sale), then she would owe NO taxes! On the other hand, when she dies, the value of her half of the holdings will receive a “step-up” basis to the value as of the date of death on her half of the holdings. Assuming she had a much lower cost basis for the shares, this would be a benefit to you as the survivor.
There are so many complex issues here, that I think you should talk to a CPA to discuss the alternatives. But first you must answer an underlying question: Does she need the money now, to live on? Or does she prefer that you retain the shares at her death? Until you figure this out, I wouldn’t do anything.
I assume you are reporting the dividends on her tax return in U.S. dollars. As for transferring the shares, that’s not likely to be an option — unless the company has some special provision for transferring foreign registered shares to a form of registered U.S.shares, and that’s not likely. And if that’s the case, you’ll have an exchange rate that works against you in the valuation of the U.S. registered shares you receive. Avoid that mess completely!