Turbo Tax treats an inherited stock as an Item donation and asks for the "Purchase Price". Since I didn't purchase the stock, is my cost basis $0 or is it the value at the time I received it? If the later, then it appears this cost basis is same as if I had purchased it, in which case why does it go thru this Item series of questions?
In the case of an inherited stock, why does Turbo tax reject a simple Stock Donation with cost basis at time of inheritance, and instead redirect to "Donated Items", Stocks, and then run through similar questions? If purchase value is the same either way, seems that either way has the same tax consequence. See attachment.
Generally speaking, the basis of inherited stock is the fair market value of the stock on the date of the decedent's death. If publicly traded stock, it s the average of the high and the low of the traded value on that date.
There are rules for donating property. They include a point at which an appraisal might be required, rules for appreciated property, etc.
I suggest that you review the rules for donations in IRS Publication 561
Ludwig - to confirm, as I have the same question, you're saying TurboTax's "purchase price" is the same as "cost basis"? I agree with the OP - I personally didn't pay for this inherited stock, but can figure the cost basis at the time I inherited it and put it in as "purchase price" if they are treating them as equivalent. (In which case, it'd be clearer if TurboTax simply put "Cost basis"!)