I had an ETF that I owned for many years. The cost basis was $29,949. My wife passed away in August of 2014. On the date of death the ETF was worth $40,310.
I then gifted the ETF to my daughter on 12/8/2021. On the date of the gift the ETF was worth $65,534. She then sold the ETF on 12/18/2021 and it was worth $67,747.
I'm doing the taxes for this transaction and I am not sure what to use for the gain. The cost basis was never updated by the brokerage company (was I supposed to inform them?) and on the 1099 it lists the full gain of $67,747.
Am I able to use a stepped up basis?
My original investment was $14,975 and my wife's $14,975.
On the date of death my cost basis is still $14,975, my wife's is now $20,155
So should the gain I need to list on daughter's tax form be $67,747 - $14,975 = $52,772 - $20,155 = $32,617 or the $37,798 listed on the 1099 ($67,747 - $29,949).
What is the correct method to list on tax form?
If $32,617 is correct do I need to concern myself over the amount reported by the brokerage house?
Thank you
