How do I report capital gains upon liquidation (within 30 days of death) of a brokerage account for a deceased taxpayer? Funds distributed to beneficiaries after liq.

[rfoggia]

I thought these assets would transfer at market value on DOD, but the broker is reporting the gains on Form 8949.

[JohnB5677 · Accepted solution]

You are correct.  The value of the stock is determined on the date of passing,  Technically, the date of the death valuation isn't just the closing price of the stock that day. Instead, to calculate the value of the stock on the date of death, take the average of the highest selling price and the lowest selling price of the stock on that date.

TurboTax has made allowances to make this correction. 

1. When posing in the Stock area there is a check box.
2. Under Box 1e - Cost or other basis 
   1. Report the basis as it shows on the brokerage firm
3. Below that you will see 
   1. The cost basis is incorrect or missing on my 1099‑B
   2. Check this box and .. Continue
4. Let us know if any of these situations apply to this sale
   1. ​​​​​​​None of these apply .. Continue​​​​​​​
5. We noticed there's an issue with your cost basis...Let us know if you'd like to make any changes
   1. I know my cost basis and need to make an adjustment
   2. Enter the adjusted amount