Brokerage reported incorrect basis AND incorrect type of gain on inherited shares

[hativered]

I inherited securities  in 2019 and had them transferred (from Morgan Stanley) to my TD Ameritrade brokerage account. In 2019 I sold everything that I inherited earlier that year. In the 1099-B that I received, the sale of 138 shares of a certain security were reported as being short term, when in reality only 10 should have been reported as short term (the reason that there are 10 that should be short term is due to dividend reinvestment that occurred after the original owner passed away). I know the general advice on misreported basis is to enter it as it appears on the 1099-B and then select the option to correct the basis. However, what I need to do is not simply change the basis for those 138 shares, but rather correct the record so that only 10 of them are reported as short term. Is it possible to do this? Please advise.

[Anonymous · Accepted solution]

did you import?  if so 

change the sale to reflect only 128 shares

and then on a (new) 1099-B worksheet enter the info for the 10 shares 

[DavidD66]

Yes, you can split the 138 shares into two separate lots - one long term and one short term.  Allocate or adjust the cost basis as necessary.

[fanfare]

Your basis in inherited shares is the value on the date of death and your holding period is always considered to be Long Term. You will have to determine that value yourself since the broker won't have that info.

Enter "Inherited" and Turbotax will put it in LT category.

For date acquired, enter "various".

[fanfare]

comment above revised.