The basis of property inherited from a decedent is generally one of the following:
- The FMV of the property on the alternate valuation date, but only if the executor of the estate files an estate tax return (Form 706) and elects to use the alternate valuation on that return. See the Instructions for Form 706.
See this IRS FAQ for more information.
You will only report a gain or a loss on the inherited stock at such time as it is sold.
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