@Jim M wrote:
It looks will have to take the $3000 and the rest is lost.
I am not sure what I wrote was clear; you cannot even take the $3000 as a loss if it was an unrealized loss on the date of death.
Example: Taxpayer pays $10,000 for shares in a mutual fund. Taxpayer later dies still holding the shares which have declined in value to $5,000 on the date of death, for a $5,000 unrealized loss. The result is the new basis of the shares is $5,000, while the $5,000 loss is wiped out (unusable).
