"If you sell those 200 shares of Costco stock and use the proceeds for a down payment, you will owe taxes, but a lot less than you probably think."
"There is no 'buying a house' exemption for investment accounts. Using the money for a down payment does not make it tax-free."
"You've landed in one of the more genuinely favorable scenarios the tax code has to offer, largely because your dad was a patient man who worked at a great company for a long time and didn't touch his stock."
A reader inherited 200 shares of Costco stock worth nearly $200,000 from her late father. She plans to use this stock for a down payment on a house but is concerned about potential taxes upon selling the shares. There is no exemption for using the proceeds to buy a house, meaning taxes will apply. However, the tax implications are less severe than expected due to favorable conditions in the tax code related to inherited stock.
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