Basis on inherited metlife trust interest shares.

[outdoorsyhuman]

 I inherited my fathers Metlife Trust Interest shares that were allocated to eligible policyholders as a result of the demutualization and are held in the MetLife Policyholder Trust (the “Trust”) in book entry form. These shares are held electronically with Computershare as custodian of the Trust.  I have sold all of the shares and was told by Computershare that that my basis is "0".  I believe that since I inherited the shares that my cost basis should be an average of the lowest and highest price it traded at on the day of his death.  Am I correct?

Thanks for any help the community might lend!

[ThomasM125 · Accepted solution]

You are correct, your cost basis would be the fair market value of the shares when you took possession of them. Often, the broker is not sure what the cost basis is, so they will leave it blank on the 1099-B form.

When you enter the form 1099-B information in TurboTax, you will see an option "I'll enter additional information on my own" on the screen where you enter the cost basis. You should click on that option to enter the cost basis of the investment sales.

[Rick19744]

Also make sure you maintain support for your cost basis figure in case you win the audit lottery.

You (taxpayer) has the burden of proof to support that figure.  Always best to do it sooner rather than later so it is not forgotten.

[outdoorsyhuman]

Thanks for the quick response!  Apparently there have been all sorts of questions and court things going on several years back with the IRS saying "0" basis  for the folks who originally were given the shares when Metlife demutualized, but I didn't think any of that applied since I inherited the shares.  Everything I read seemed to imply the basis would be the fair market value at the point of inheritance.  For me, since the stock is worth less than when I inherited it, it's the difference between owing a boat load of taxes (if the basis were "0") or taking a small loss.   

Thanks again.