Using Spec ID Cost Basis with a Grantor Retained Annuity Trust

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ofj
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Joined: Sat Mar 31, 2007 2:59 pm

Using Spec ID Cost Basis with a Grantor Retained Annuity Trust

Post by ofj »

I am trying to decide between keeping mutual fund shares in Specific Identification (SpecID) or change to average cost basis. My spouse and I been using Spec ID in our taxable accounts and have the paper records of our pre 2012 share purchases. We have revocable trust accounts and have recently funded Grantor Retained Annuity Trusts (GRATs). A portion of the shares need to be transferred annually from the GRATs to the revocable trusts. One GRAT is for 5 years and the other for 8 years.
I assume that we will need to keep a record of which shares are transferred between trusts even though the transfers do not involve buying or selling of shares. I also assume If we revert to average cost basis for the transfers to simplify record keeping, we would then not be able change back to SpecID after all the share have been transferred back and the GRATs are closed. Are these assumptions correct? Thanks for your input
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