By the way, the rule on cost basis of an estate is actually not that simple.
The Cost Basis and the value of the asset must be determined by taking either the fair market value ("FMV") per share on the date of death, or the market value six months later if the alternate valuation date is elected by the Personal Representative ("Executor"). The alternative date may be chosen if the entire estate is worth less at the alternative date. The alternate valuation date can only be selected for the estate as a whole, not on a stock-by-stock basis. Even if an inherited stock's price is higher at the six-month mark, if the Personal Representative selects the alternate valuation date, you use the higher value.
The FMV is calculated as the average of the high and low trading prices for the date of death [or the date 6 months later as the alternative]. If the date falls on a weekend, use the average of the Friday and Monday average trading prices.
In either case, it is the FMV chosen that becomes the "stepped-up" basis.
If this posted response is useful to you, please click on the upraised hand in the lower left of this post. Thank you. Scruffy Curmudgeon--PFFM/ IAFF, retired FireFighter/Paramedic - Locals 718/30, Veteran USAR O3 AIS/ASA '65-'67
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