Basis of inherited stock

[baconli]

 I inherited stock from my mother who passed away in 2020.  The stock was liquidated and proceeds sent to me in Dec 2020.  The basis on the 1099 B shows blank for a large portion which is shown as short term not covered and as a small amount shown as long term covered.

What is my basis in the stock?  FMV on date of death?  why doesn't the 1099 show that?

[ColeenD3]

Yes. 

The cost basis of inherited stock is generally the market price of the stock on the date that the benefactor died.

In rare cases, the executor of the estate will make a special election to treat the stock differently. Check with the executor to be sure.

It is not the job of the issuer of the 1099-B to determine this. The only information they can provide is the purchase price and often you only get this when the institution themselves arrange the purchase.

[rjs]

The sale of inherited stock is always treated as long-term, regardless of how long you or your mother actually owned it. For the acquisition date enter the word "Inherited" instead of a date, and list it as long-term, no matter what the 1099-B says.

[Anonymous_]

Per Section 1223(9), the holding period for property acquired from a decedent is long term, regardless of how long the property is actually held.

Your basis would be the fair market value of the stock, but it would be calculated by taking the high and low of the stock, on the day of the death of the decedent, adding the two figures and then dividing by two (e.g., high of 22.00 and low of 20.00 would equal a basis of 21.00).

[Mike9241]

sorry for your loss. you would need to have informed the broker of the date of death and then follow whatever procedures they have to update the tax basis.  also while the shares held on DOD are long-term subsequent reinvested dividends are short-term if not sold after holding over 1 year.