My father-in-law inherited stock from his mother in 2003 (thus we stepped-up the cost basis to her date of death at that time).
He deposited/transferred the stock into a JTWROS ETrade account owned by himself and my mother-in-law. He passed away this year never having disposed of the inherited stock.
What will the step-up basis of the stock be a) 1/2 of stock to his date of death and the other 1/2 to his mother's date of death (which is his original basis); or b) all stepped-up to his date of death (we do NOT live in a community property state).
My thinking for b) is that the stock was not a joint asset paid for by himself and my mother-in-law and this should all be stepped-up to his date of death even though it resided in a JTWROS account?
When one joint tenant dies, one-half of the JTWROS assets receives a stepped-up basis.
Let's say that Grandma's stock had a value of $100,000 at her death. Since the stock was in a JTWROS account, each of your parents-in-law owned 1/2 of the shares. Each half would have a stepped-up basis of $50,000. When one parent-in-law dies, their half of the shares would be stepped-up to its value as of the date of death. The surviving partner's half would retain its original $50,000 basis.
When one joint tenant dies, one-half of the JTWROS assets receives a stepped-up basis.
Let's say that Grandma's stock had a value of $100,000 at her death. Since the stock was in a JTWROS account, each of your parents-in-law owned 1/2 of the shares. Each half would have a stepped-up basis of $50,000. When one parent-in-law dies, their half of the shares would be stepped-up to its value as of the date of death. The surviving partner's half would retain its original $50,000 basis.