taxes on trust distribution

I will soon receive a significant amount from a Crummey Trust. The trustee says I have a choice of taking the securities or having them cashed in and taking the cash. She says I will have to pay income tax on the significant realized gain if I take the cash. However she cautions me that no broker is likely to accept some of the securities. I have checked and that is true; none will take "HSBC Bank USA NA Tax Exempt Inc Fund".
So two questions...
1) Is that correct about having to pay taxes on realized gain if I take cash? I thought inheritances were tax free, but maybe a trust is different.
2) I left a voice mail asking if I can have her sell the single nontransferable security and then the other securities transferred, but haven't received a reply. Is there some reason reason that can't be done?
Reply to
Troubled
Who is holding the securities now? Why can't they continue to hold them after you take possession of them?
Technically a Crummey Trust isn't an inheritance. It was a series of gifts made over time, and you were the owner (for tax purposes) on each gift from the time it was made. So you get no step-up in basis based on the death of whoever made the gifts, because the gifts were made during lifetime rather than at death.
Not that I am aware of. But it's up to the individual stock broker what they will accept and what they won't. If the current broker won't take it in an account for you, look around to see if you can find someone who will.
Reply to
Stuart A. Bronstein
Over and above what Stuart said.... are you sure about that HSBC fund name you posted? I was unable to find any HSBC mutual fund by that name. If it is a money market fund, it does not matter as there won't be a gain on liquidation.
Reply to
Alan
HSBC has a bunch of proprietary funds they only sell to their investment clients. (I happen to know about them because I'm one of their clients.) I think this is an old one that isn't open to new investors.
Reply to
John Levine
...but even proprietary funds are publicly listed. I wouldn't think that a closed fund would no longer be listed.
Reply to
Alan
The trustee finally got back to me. DTAX is something only available to their trust department; it can't be transferred to anyone. Great.
Reply to
Troubled

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