Step up cost basis for an inheritance

[rgn55125]

I received a K-1 with a long term capital gain for an inheritance of a long dead relative. I need to step up the cost basis to the time of my mother's death.  How do I do that when the K-1 received from the estate has the long term capital gain box filled with the original value of the inheritance, not the step upped value?

[dweelea]

Research.  If what you inherited is publicly-traded stocks, you can look up the value on specific dates.  If you inherited property, such as a house, you should be able to find records of comparable homes sold at the time of your mother's death. It depends on exactly what you inherited.

[rgn55125]

I have reasonable idea of what the cost basis should be, but I am unsure how to handle it within Turbo Tax. I  can't change the K1, but have to compensate it somehow.

[tagteam]

"How do I do that when the K-1 received from the estate has the long term capital gain box filled..."

You don't. The basis was determined at the estate level (at such time that the 1041 for the estate was prepared) so you will have to contact the fiduciary (or whoever prepared the income tax return for the estate).

[rgn55125]

I have talked to the fiduciary and he won't change the entry. The estate is from a relative that died multiple generations ago. He had stock in a company he bought in 1905 that was liquidated between 2010 and 2012.

[tagteam]

Game over.....the IRS has the 1041 and K-1 at this point and the IRS can match what you enter on your return with the K-1 you received (obviously, they had better match).

If the fiduciary won't amend the return, your recourse is to challenge him/her/it in court (i.e., probably not worth the time and expense, assuming you win).

[rgn55125]

Thanks for input.