I'm sorry to hear about your grandfather's passing. When you inherit stocks, the cost basis is usually "stepped-up" to the fair market value on the date of your grandfather's death. To report the stock payout, you'll need to include it in your tax return when you sell the inherited stocks. When you sell the stocks, here's what you need to do: 1. Report the transaction on Form 8949, Sales and Other Dispositions of Capital Assets. 2. Include the date you sold the stocks, the sale price, and the stepped-up cost basis. 3. The difference between the sale price and the stepped-up cost basis will result in either a capital gain or loss. 4. Transfer the information from Form 8949 to Schedule D (Form 1040), Capital Gains and Losses. 5. Include the result from Schedule D on your Form 1040, U.S. Individual Income Tax Return. Remember to keep records of the fair market value of the stocks on the date of your grandfather's death and any other relevant information to calculate the stepped-up basis accurately.