I am preparing a 1041 estate income tax return. My deceased mother in law had an investment account. I know the original cost basis for each of the investments. For some, the original cost basis is higher than the "date of death" cost basis (in other words, the mutual fund or stock had gone down in value between when it was purchased and when she died.) Do I have to use the "date of death" cost basis in all cases, even when it is lower than the original cost basis?
Thanks.
@andy_howard wrote:
Do I have to use the "date of death" cost basis in all cases, even when it is lower than the original cost basis?
Yes, per I.R.C. §1014(a)(1) you must use the fair market value on the date of the decedent's death.
It is irrelevant that the value is lower than the original cost basis, unfortunately.