Huge appreciation on jointly owned stock and mutual fund portfolio. How allocate the stepped up basis to half the portfolio when survivor sells just some of the stocks?
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You don't allocate the step-up to select holdings, you apply it to all holdings. The formula is (Date-of-death fair market value + Old basis) / 2 = New Basis) For instance, if you owned stock XYZ worth $5,000 at the time of your wife's death, and your basis was $1,000, you new basis is $6,000 / 2 = $3,000.
You don't allocate the step-up to select holdings, you apply it to all holdings. The formula is (Date-of-death fair market value + Old basis) / 2 = New Basis) For instance, if you owned stock XYZ worth $5,000 at the time of your wife's death, and your basis was $1,000, you new basis is $6,000 / 2 = $3,000.
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