I am helping my mother fill out her federal tax forms. My father passed away in 2022 and she sold his stocks in 2023. The 1099-B form lists the original date of purchase, or various, and not his date of death. Can she simply modify the date the investments were acquired in Turbo Tax to his date of death and check the "The cost basis is incorrect or missing on my 1099‑B" box?
was the account holding these securities in his name only ?
sorry for your loss. more importantly, is the cost reported the fair market value on the date of death (except for any acquired after he died)? thats the tax basis your mother assumes becuase she was not an owner when he died (not on the account)
for the date acquired held on the date of death you need to enter "inherited" no quotes
that tells Turbotax all the gains and losses on these securities are long-term. entering his date of death might not do this if it's less than a year between death and sale.
reporting type would be E "proceeds but not cost reported to the iRS" for cost you enter the FMV on the date of death. go back to the broker and request this info if you don't have it. Hopefully they'll be helpful if you give them the reason.
IRS instructions say use code B and enter zero in adjustment column
In turbo tax, I am not given the option to designate the stocks as "inherited". The only option in the drop down is "various". Am I missing something?
If your mother and father were married, she did not inherit the stocks. They are joint property so the original purchase date IS the acquisition date. You can't inherit from a spouse.
If you indicate on the 1099-B Entry Screen under 'How Did You Receive this Investment' that 'I inherited it', the Date Acquired Field goes away, as it is not needed.
I'm having same problem with entering "inherited". The option for "How did you recieve this..." is not showing up on my screen.
It depends how you may have entered it. You can enter it yourself using the steps below or you can simply select the holding period of 'Long term uncovered or Long term'.
Inherited property is always considered to have a long term holding period which provides favored tax treatment. For this reason the holding period is the most critical to have capital gain treatment assuming you have a gain.