topic Would the cost basis of stocks inherited from a parent who died be stepped up? What about from a spouse who died? in Investing

Would the cost basis of stocks inherited from a parent who died be stepped up? What about from a spouse who died?

460211419 — Tue, 24 Feb 2026 08:19:31 GMT

Re: Would the cost basis of stocks inherited from a parent who died be stepped up? What about from a spouse who died?

Anonymous_ — Wed, 20 Dec 2023 21:31:34 GMT

Your question is very broad-based but there is typically a step up in basis provided the asset is included in the decedent's gross estate.

Re: Would the cost basis of stocks inherited from a parent who died be stepped up? What about from a spouse who died?

DJS — Sat, 30 Dec 2023 02:32:58 GMT

Most of the time, you calculate the cost basis for inherited stock by determining the fair market value of the stock on the date that the person in question died. Sometimes, however, the person's estate may choose what's known as the alternate valuation date, which is six months after the date of death. In that case, the inherited cost basis can be much different from the deceased person's cost basis before death.

A decedent's interest in property held in a joint tenancy (with a right of survivorship) or a tenancy by the entirety that passes to the other owner by operation of law is considered property acquired from a decedent (IRC § 1014(b)(9); Reg. §1.1014-2(b)). Therefore, the surviving tenant's basis in the property consists of his or her old basis in their original interest and the fair market value of the decedent's interest. If spouses held property as joint tenants or as tenants by the entirety, the surviving spouse's total basis in the property is deemed to be one-half of the original cost basis and one-half of the fair market value of property on the date of the decedent's death (or alternate valuation date), reduced by the surviving spouse's share of any depreciation taken on the property prior to the decedent's death (IRC § 1014(b)(9); Reg. §1.1014-2(b)(2); Rev. Rul. 56-215).

Re: Would the cost basis of stocks inherited from a parent who died be stepped up? What about from a spouse who died?

Anonymous_ — Sat, 30 Dec 2023 03:25:35 GMT

@DJS wrote:

......Sometimes, however, the person's estate may choose what's known as the alternate valuation date, which is six months after the date of death....

That is only applicable (available as an election) if the alternate date both decreases the value of the gross estate and the amount of estate tax due, per Section 2032(c) (i.e., it applies to only a very small number of estates).