@jtax This testamentary trust was what I believe is know as a credit bypass trust; set up by my father before he passed away, at which point the income from the trust was distributed to my mother until she passed away. I know for a fact that the basis was not stepped up upon my mother's death. I guess the main point is that just because an asset is inherited does not automatically mean its basis is stepped up. So I'd be interested to know why TurboTax (or is it the IRS) needs to make the "purchased" versus "inherited" distinction. At least as concerns basis, that distinction might be useless unless more is know about what the asset is that was inherited. JMHO
