Mutual Fund Question

[ChongoChingi]

I have a mutual fund that I just inherited with about 8K in it. I am thinking of taking it out and paying off some debt. If I pull the money out I know there are not any penalties but what kind of taxes will I pay on it at the end of the year?

Thanks!

[Birchtree]

Check and see if there is a step up in basis that applies. If so the only gain you will pay tax on is from the value you inherited and any gain from that point on. For example - if it was worth $8,000 when you received it and it is now worth $8,500, you pay tax on the $500.00 probably at a 15% rate.

[ChongoChingi]

I say inherited, but both of ours names were on the account. I am now having the account moved over to just my name.