What is correct date acquired, and hence value on that date for inherited mutual fund? (date of death vs. date transferred to my name which 1099-B value is based on)

Parent died Sept 2010 but fund not transferred to my name until March 2011.

All I have read says inherited funds are to be valued at the stepped up basis on date of death. However the 1099-B from Vanguard is using the date transferred to my name and account, and the share price on that day, not the date parent died and share price on that day. (even though it was held at Vanguard in parent account before transfer to me at Vanguard in my account.) Is that any problem that 1099-B info won’t agree with using the actual date of death to value the cost basis of the fund, now that I have sold it in 2018?

These are now mostly non covered shares.

(By the way, 2010 special rule for inheritance did not come into play, and this is to be treated normally as all other years would treat it.)

1524

Level 15

Jun 3, 2019 12:38:00 PM

Date of deathis corrct

The 1099 should be corrected

You are responsible filing a correct return

See this part of tax law https://www.law.cornell.edu/uscode/text/26/7434

Level 4

Jun 3, 2019 12:38:01 PM

To back up a step on this question and answer, should this really be treated as “inherited”? Otherwise how would a fund company know to value something at date of death if the deceased parent had held it at another fund company before it was transferred to my fund company? There wouldn’t be any way they would know date of death, they would only know the cost on date it was transferred to my account. (However in this case Vanguard was fund company for both my parent & myself, and so would that require that they be aware of this? I opened a new account and did an in kind transfer to get the funds into my account from deceased parent.)

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What is correct date acquired, and hence value on that date for inherited mutual fund? (date of death vs. date transferred to my name which 1099-B value is based on)