[cabmandone]

Originally Posted by Noah930

My father has a regular (non-Roth, non-IRA, etc) investment account with a combination of equities and cash. It's got about $56K total in it, roughly half equities and half cash. He says he hasn't touched it in about 20 years. He would like to pass on the wealth to his grandchildren. Given that there are equities involved, how can he do so in the most tax-advantaged manner?

His overall desire is to divide the $56K evenly between the 5 grandkids and gift them each lump sums of about $11K. That won't invoke any gift taxation from the IRS. (Would be different if he tried dividing the $56K by two, and gifting half to my sister and half to me.) But if he sells the equities, there will be long-term capital gains to be paid. He's trying to avoid that. He's fine with a straight gift, or via a 529, or however he can pass on the wealth to the next generation(s) with minimal tax exposure to all parties involved.

It's the equities (maybe $30K worth?) that I can't figure out. What he's held has been held for so long, looking at a monthly statement, I cannot figure out the cost basis (that line is blank). How do you figure out long term capital gains when you have no idea what the original cost basis was?

One of you guys has to have a clever way around this issue.

List them as beneficiaries on the account. When he passes they'll receive a step up cost basis and it will go to them tax free if I'm not mistaken.