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Question for the Money Doctors

Question submitted on Nov 27, 2012.

Question

When my husband passed away his company shares from the United Kingdom were transferred to a brokerage account in Texas. My question is are there different type of brokerage accounts? Shares came from two different plans. Share Incentive Plan (pretax earnings) with matched partnership shares which are taxfree if held in plan for 5 years AND Non tax qualified share shop through which you make contributions to buy shares. Thank you

Answer

Brokerage accounts can be owned or titled in several different ways, including but not limited to a regular taxable account, an Individual Retirement Account (IRA), a ROTH IRA, or a sef-directed company 401(k) account. When the shares are transferred from the two plans, take care to title the receiving brokerage accounts properly. If the Share Incentive Plan is a qualified plan for US income tax purposes, as the surviving spouse you may be eligible to roll those shares on a tax-free basis into a newly established IRA brokerage account. Please carefully review the paperwork from the UK Company Human Resources Department for your available options.

Please visit www.findacpapfs.com to find a CPA/PFS in your area, who will be able to help you interpret your options as well as advise you on both the Federal and State tax consequences of the transfers.


For additional information visit http://www.360financialliteracy.org/