My mistake. One question is who owned the assets? Only the owner or owners can take the deduction.
If mom owned them only she can take the deduction. If she gifted the assets to her children she has to file a gift tax form 709. As to the cost basis, the basis of gifted assets is the cost basis of the one who gave the gift. If the assets were owned jointly by your parents there would be a step up in cost basis for Dad’s ownership when he died. Given the large amount of money involved as well as the complexity you really should get professional advice.
