"Because Mom inherited Dad's ownership share, she may be able to increase the basis of the stock. For example, if the stock was jointly owned and they paid $8,000, and it was worth $20,000 at Dad's death, there is a gain of $12,000. One-half, or $6,000, of that gain is Dad's, so Mom can now add that to the original basis of $8,000. Her new cost basis is now $14,000. On the other hand, if Dad was the sole owner of the stock and Mom inherits it, her new cost basis would be $20,000."

Denise says the good news is that capital gains tax rates in 2009 and 2010 for people in the 10 percent and 15 percent brackets is 0 percent.

"In the example, if Mom now sells the stock for $18,000, her gain will be $4,000," Denise says. "But, if she is in the 10 percent or 15 percent bracket for ordinary taxable income, she may not pay any taxes at all on the gain from the sale.

"Other issues to consider are which stocks (or lot of stocks) from the portfolio should be sold. Different stocks can be identified and sold that have a different cost basis to either increase or decrease the taxable amount."

But Denise says it's also important to look beyond the numbers.

"I think it would give her a lot of peace of mind to not have this mortgage … plus it does improve her cash flow," Denise says. "I always try to consider not only the math and the number-crunching part of it, but also what's the best for her psyche."

Sounds like a good plan to me, BJ. Please drop me a line to let me know how things work out.

If you have comments or financial questions, send them to gkratz@desnews.com or to the Deseret News, P.O. Box 1257, Salt Lake City, UT 84110.

E-MAIL: gkratz@desnews.com