Context: My mother passed away a few years ago. Last year in 2019, we were notified about unclaimed property belonging to my mother in Illinois. Upon filing a claim, I quickly sold the few shares of stock that was included. The 1099B I received doesn't have anything for box 1e.
1) Should the cost basis be the stock price at the time of my mother's passing?
2) If so, how should I notify the IRS of this?
The 1099-B is reported to the IRS. There is no way to explain something on a tax return. It is handled as demonstrated below.
You would have encountered these screens as you entered the stock:
You will encounter the screen below:
We noticed there's an issue with your cost basis...Let us know if you'd like to make any changes
Because the cost basis was incorrect or missing on your 1099-B, we recommend reviewing your cost basis to make sure it's reported correctly.
We've got your back and can help you figure out the correct cost basis so that you don't pay more taxes than you should.
Basis is date of death value and whoever received proceeds should report the gain if there is any gain.
You do not need to make a special notification to the IRS. Including it as your basis does just that.
@ColeenD3 I thought a 1099 is sent to both me and IRS. If mine has a different cost basis, I thought I would need to explain the discrepancy.
The 1099-B is reported to the IRS. There is no way to explain something on a tax return. It is handled as demonstrated below.
You would have encountered these screens as you entered the stock:
You will encounter the screen below:
We noticed there's an issue with your cost basis...Let us know if you'd like to make any changes
Because the cost basis was incorrect or missing on your 1099-B, we recommend reviewing your cost basis to make sure it's reported correctly.
We've got your back and can help you figure out the correct cost basis so that you don't pay more taxes than you should.